Online sales surge at Ahold Delhaize USA
In its fourth-quarter report, Ahold Delhaize USA reported a huge acceleration in online sales, with a 42.7% increase that the company said reflects the retailer’s leading omnichannel position on the East Coast.
For one, the retailer now operates 692 click-and-collect locations but plans to reach 1,000 click-and-collect locations during 2020, per the report, fueling sales growth of 30% or more it hopes to see in the future.
Ahold Delhaize sees omnichannel in this East Coast threshold as taking the leading national brands and private brands and marrying them up with digital, e-commerce solutions, and that will win more customer wallet share. This is also what caused the company to shut down its Peapod operation in the Midwest (which represented $97 million out of $1.1 billion total in U.S. online revenues in 2019), and the company said in the report that the closure will not significantly impact it reported operating profits.
Also in regards to its own brands, Ahold Delhaize noted that half of all own brand sales expect to be recognized for having good nutritional value, up two percentage points from what was counted in 2019.
The company said strong sales at its Food Lion and Hannaford banners, as well as a 42.7% jump in online sales, helped it accelerate growth in the fourth quarter. Same-store sales grew 2.3% in its U.S. division.
Operating income overall at the retail conglomerate rose to $834 million for the period ended Dec. 31, while sales rose 5.5% to $18.9 billion, helped by a strong dollar. The company said that it expects to reach $7.7 billion in group online sales by 2021.
"Our online sales growth in the U.S. accelerated to 42.7% at constant exchange rates in the fourth quarter, and we met our 2019 guidance outlook of over 20% growth, building upon our position as the leading omnichannel operator on the East Coast," according to CEO Frans Muller said. "Performance at Food Lion and Hannaford was particularly strong. While Stop & Shop's comparable sales, excluding gasoline, improved over the last quarter, they remained slightly negative due to a challenging sales environment. That said, our ‘Re-imagine Stop & Shop’ program continues to build momentum with sales in Long Island [New York], and now Hartford, performing in line with our expectations. In 2020, we expect to remodel another 65 Stop & Shop stores across the brand’s footprint."