Ahold, Tesco to highlight growth ambitions

By Mark Potter

LONDON (Reuters) - Two of Europe's top retailers, Britain's Tesco (TSCO.L) and Dutch group Ahold (AHLN.AS), will highlight their long-term growth ambitions next week in moves that could lift their lowly-valued shares compared to peers.

Ahold, which makes about 60 percent of its sales in the United States, is expected to unveil a cost-cutting plan which analysts think could be worth up to 500 million euros (446 million pounds) over three years.

The group, which reports third-quarter results on Wednesday, will also come under pressure to spell out its plans for a cash pile of over 2.5 billion euros.

Tesco, the world's No.3 retailer behind France's Carrefour (CARR.PA) and U.S. leader Wal-Mart <WMT.N, is holding two days of seminars for analysts and investors on its retail services business, which includes banking, on Thursday and Friday.

Also on Thursday, Britain's Wm Morrison Supermarkets (MRW.L) is expected to report a slowdown in third-quarter underlying sales growth, in line with rivals which are all feeling the affects of a drop in food price inflation.

In parts of Europe and the United States, lower food price inflation has turned to deflation, putting pressure on groups like Ahold.

Last month, the Dutch company reported a slowdown in third-quarter sales growth and the first quarterly decline in underlying sales at its market-leading Albert Heijn chain in the Netherlands for around six years.

However, analysts are still on average pencilling in a 3.4 percent rise in third-quarter operating profit to 271 million euros, thanks to a tight grip on costs.