Dive Brief:
- Ahold Delhaize USA’s e-commerce operations powered its latest financial results, as the grocer reported a 14.2% increase in digital sales in its third quarter, the grocer reported Wednesday.
- Comparable-store sales excluding gas for ADUSA continued to struggle during Q3, however, increasing just half a percentage point. Net sales ticked up 1% to nearly 13.3 billion euros ($14.9 billion).
- The larger Ahold Delhaize company expects the cybersecurity incident it got hit with last month to reduce fourth-quarter net sales by between 200 million euros and 250 million euros.
Dive Insight:
Ahold Delhaize’s U.S. operations weathered several hurdles throughout the third quarter.
ADUSA’s comparable sales took an approximately 2.1 percentage point hit due to the Inflation Reduction Act, which negatively impacted pharmacy sales, as well as egg deflation, the cyclospora outbreak and lower SNAP benefits from program changes, the company reported.
“While several external factors weighed on reported results, the underlying competitive momentum in our U.S. business is encouraging,” Ahold Delhaize CFO Jolanda Poots-Bijl told investors.
Online sales remained a bright spot not only for ADUSA’s business, but also for the larger Ahold Delhaize company. Ahold Delhaize’s omnichannel sales increased 8.2% this quarter, driven by the more than 14% U.S. growth in digital sales. This growth marks ADUSA’s 10th consecutive quarter of double-digit e-commerce growth, Poots-Bijl noted.
She added that Food Lion alone sustained online growth of more than 20%.
The banner continued to be a bright spot in ADUSA’s operations. Food Lion also recently launched a remodeling project at 92 stores in the Greensboro, North Carolina, market and has preparations underway for the next round of remodels in the Richmond, and Roanoke, Virginia, markets, President and CEO Frans Muller said in a written statement.
Ahold Delhaize expects to face similar headwinds in Q4 — as well as feel the financial impact of the cybersecurity incident in early October.
“Looking ahead, we expect the Inflation Reduction Act headwind to remain broadly similar in Q4, while the impact from egg deflation should moderate,” Poots-Bijl said. “We do not anticipate further effects from cyclospora, while SNAP might still create some quarterly variability.”
Ahold Delhaize updated its full-year outlook and now expects its underlying operating margin to be “approaching 4%” rather than “around 4%.”
“For now, Q4, we are recovering from the cyber incident. All our online websites… are on track, and we are totally prepared for the festive season because that is the most important driver for our Q4 results,” Poots-Bijl told investors.
