- Ahold Delhaize reported strong first-quarter earnings on Wednesday, with U.S. comparable store sales up 3.3% excluding gas and net sales up 5.8% at constant exchange rates, to 12.2 billion euros ($12.7 billion).
- The company disclosed that its Stop & Shop banner's market share slipped 1.1 percentage points between Q4 2019 and Q4 2021. Food Lion, The Giant Company and Hannaford all gained market share during that time period. The company did not disclose market share data for its Giant Food banner.
- Ahold Delhaize executives said during a conference call on Wednesday morning that a pandemic-driven slowdown in Stop & Shop’s remodeling campaign was a key factor behind the market share loss.
Ahold Delhaize has noted lagging performance from Stop & Shop in recent earnings calls, but in a presentation for analysts on Wednesday, the Dutch retailer laid out just how much its Northeast banner’s market share declined over a key two-year period.
The 1.1 percentage point share loss came during a period when supermarkets and big-box retailers saw an explosion of business fueled by the pandemic. That Stop & Shop lost customers during that pivotal span is a worrying sign for the chain that was founded more than 100 years ago, and which Royal Ahold NV acquired in 1996.
Food Lion, by contrast, saw its market share rise 1.8 percentage points during the same period while The Giant Company’s and Hannaford’s market share both rose by 0.5 percentage points.
Executives said the pandemic has led to construction delays and higher costs for building materials that have slowed down Stop & Shop's remodeling push, which began in 2018. A Stop & Shop spokesperson said Thursday that the chain has so far updated around 140 of its roughly 400 locations.
“We really just haven't had the opportunity to complete the really aggressive remodeling program that we have envisioned,” Ahold Delhaize Chief Financial Officer Natalie Knight said during Wednesday’s earnings call. “If we look at Food Lion several years ago, that was really the key to success was, in addition to looking at pricing and culture, you got a different look and feel when you went into the store.”
She continued: “[The remodels] have been slower than we would have liked during COVID-19 because it was really just hard to get spots secured with ... all of the technical requirements able to do it. We are moving in at full speed at the moment.”
Stop & Shop’s store remodels include expanded fresh food assortments, more meal options and updated department signage. Ahold Delhaize CEO Frans Muller said the banner will soon open a remodeled store in the Bronx that has a refreshed assortment that better reflects the cultures and ethnicities of people in the surrounding neighborhoods.
Muller said Stop & Shop is also closely collaborating with FreshDirect, the New York-based e-grocer that Ahold Delhaize acquired in 2021 to improve service throughout the Tri-State area. He said the company will have more to share in the second half of this year.
In addition to speeding up Stop & Shop’s store remodels, Ahold Delhaize said it’s focused on staying relevant with consumers as inflation remains high and grocery prices continue to climb. In a press release, the company said it’s featuring its private label items more prominently in stores and online. In the U.S., Ahold Delhaize’s store brands account for roughly 30% of sales, the release noted.
Stores are also offering new savings programs for shoppers. The Giant Company is offering double rewards points on purchases of items labeled under its Guiding Stars nutrition rating system, while Giant Food now has a bulk-item aisle offering savings on large pack sizes.
This story has been updated with information on how many Stop & Shop locations have been remodeled.