Belgian supermarket group Delhaize’s shares dropped slightly following warnings over cost inflation in its third-quarter.
Shares today (10 November) fell 0.56% to EUR44.9 (US$61.2) at 13:30 BST after president and chief executive officer Pierre-Olivier Beckers cautioned that consumers will trade down if high commodity costs are passed on to them.
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The company, which has an extensive presence in the US, posted a net profit from continuing operations of EUR133m, a drop of 5.4% in actual rates, but a rise of 0.5% in like-for-like. Operating profit was EUR238m, a 4.7% drop in actual and a like-for-like rise of 1.8%.
For the three months ended 30 September, revenues rose to EUR5.3bn, a 0.4% actual rise and a 6.6% like-for-like rise.
Beckers said he was particularly pleased with the performance of Alfa Beta in Greece and Mega Image in Romania, which he said generated strong profitable revenue growth in a difficult environment, as well as the rebranded Food Lion markets, which “continue to deliver excellent results”.
However, he added that consumers will not accept price rises from high commodity prices.
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By GlobalData“Looking ahead, we need to be mindful of the fact that business conditions across our markets became tougher towards the end of the quarter as it is increasingly difficult to pass on higher cost inflation to retail prices,” he said.
“We expect this environment will continue to have an impact on the remainder of the year.
“The economic environment, especially in the Southeast of the US, continues to weigh on customer sentiment and their spending behavior,” he added.
