February 27, 2019 / 6:25 AM / 5 months ago

Ahold says on course to meet U.S. online sales growth targets

AMSTERDAM (Reuters) - Ahold Delhaize, which operates supermarkets in Europe and the United States, is on track to meet a 20 percent U.S. online sales growth target this year as it opens automated grocery distribution points along the East Coast, its chief executive said on Wednesday.

The Ahold Delhaize logo is seen at the company's headquarters in Zaandam, Netherlands August 23, 2018. Picture taken August 23, 2018. REUTERS/Eva Plevier

Frans Muller, promoted to the top job last July, said in an interview that Ahold, which makes roughly two-thirds of its sales in the United States, plans to open several more of the automated hubs in 2019.

The comments came after Ahold said on Wednesday that group net consumer online sales rose 25 percent to 1.1 billion euros in the fourth quarter at constant exchange rates.

In the Netherlands, where it also operates the non-food Bol.com retailer, Ahold saw strong online sales growth of 28 percent. In the U.S., online sales rose 12 percent at constant exchange rates to 203 million euros in the three months through Dec. 31.

Overall, Ahold said its core earnings rose 9.5 percent in the fourth quarter, bolstered by strong online sales growth, meeting market expectations.

Muller has said the company hopes to make acquisitions to meet targets of 20 percent online U.S. sales growth in 2019 and 30 percent in 2020.

“We are on track for 2019 to make our 20 percent. That’s all planned for and I am excited about reaching 30 percent,” Muller told Reuters. “I think the market is there.”

Speaking about acquisitions, Muller said, “we see more opportunities in the U.S. The market is consolidating. We have a strong base and strong brands along the East Coast.”

In November, Ahold announced plans to roll out small, automated warehouses to increase order picking and cut delivery times, part of a revamp of its ecommerce business to help fight competitors like Kroger, Walmart and Amazon.

Muller said several new centers will be opened this year, with a higher number in 2020, but gave no specific number.

Ahold’s underlying income increased to 691 million euros ($786 million) in the three months through Dec. 31, in line with forecasts. Ahold shares slipped 1.8 percent by 0835 GMT.

Ahold, which operates the ‘Stop & Shop’ and ‘Food Lion’ chains in the United States, confirmed its 2019 target of 750 million euros in gross synergies from the merger with Delhaize.

Reporting by Anthony Deutsch; Editing by Keith Weir

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