The weak dollar weighed on the first-half results at Netherlands-based retail giant Ahold, the company said this morning (30 August).
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Ahold, which operates under the Stop & Shop and Giant-Landover banners in the US, said an “adverse currency impact” had hit first-half profits at the company.
For the six months to the end of June, operating profit reached EUR626m (US$853m), down 4% on the year. Net sales inched up 1.6% to EUR15.2bn; stripping out the effect of currency fluctuations, turnover was up 6.1%.
Ahold CFO John Rishton – also the retailer’s acting president and CEO – said the results showed the company is “making progress”.
Rishton pointed to the roll-out of Ahold’s so-called “value improvement programme”, a strategy to reduce prices and stock a higher number of products, at its Stop & Shop and Giant-Landover stores in the US. “The roll-out…remains on-track with customer perception of price reductions continuing to improve,” Rishton said.
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By GlobalDataSales at Ahold’s Stop & Shop and Giant-Landover stores were mixed during the first half; sales at Stop & Shop outlets inched up 0.7%; at the Giant-Landover stores, sales fell 1.1%. Profits from the business tumbled 24% due to restructuring charges and price reductions under Ahold’s “value improvement programme”.
Ahold had better news from its Giant-Carlisle business, were sales rose 15% to $2.3bn. Operating profit reached $113m, up from $100m a year earlier.
In Europe, Ahold’s Albert Heijn stores saw turnover rise almost 12% to EUR4.2bn, thanks in part to last year’s acquisition of the Konmar stores in the Netherlands. Operating profit jumped 37% to EUR280m.
In the Czech Republic and Slovakia, Ahold saw sales rise 10.2% to EUR776m from its Albert and Hypernova stores. The businesses broke even after a loss of EUR14m last year.
Sales from Ahold’s Schuitema business inched up 2.3% to EUR1.8bn, not enough to stave off a 30% fall in operating profit to EUR39m.
Ahold’s share from its ventures and associates reached EUR54m, down EUR8m on the year.
