Dutch retailer Ahold has reported strong Q3 results. The company saw a 17% rise in net profit, double the profit increase reported by the world’s leading retailer and Ahold’s key rival Wal-Mart in the same period.
Following several key recent strategic acquisitions, the Dutch retailer is well placed to see continuing rapid international growth in the future, despite tough economic conditions.
Dutch-based retailer Royal Ahold NV’s overall Q3 sales were up by 13%, with organic sales growing by over 6%, driven by strong performances in its core markets of Europe and the US. The world’s third biggest supermarket retailer reported encouraging growth in the US market, where it has seen sales grow by 6%. Sales have been strong in Europe, rising by 16% to E5.2 billion.
Ahold has been relatively unaffected by the downturn in the global economy and the repercussions of September 11, as consumers have fallen back on core food and drink products.
Recently Ahold has adopted an aggressive expansion strategy on both sides of the Atlantic. In Europe it has bought the Superdiplo chain in Spain, ICA in Scandinavia and entered into a joint venture with Dansk Supermarked to develop discount stores and hypermarkets in Sweden and Norway. It has also expanded its presence in the Czech market through new store openings. In the US, Ahold acquired foodservice giant Alliant and the Bruno’s supermarket
chain last September. It has also been concentrating on the development of more convenience store formats in both Europe and the US.
But while these results reflect well on Ahold’s performance in its core markets, they are a setback for its visions of global grandeur, with sales declining in both Latin America and Asia. The retailer is optimistic about the future of its Latin American operations, putting the poor Q3 results down to effects of currency fluctuations.
Ahold is expanding both its breadth and depth, having expanded geographical coverage as well as moving into new areas such as foodservice, financial services, convenience stores and discount retailing. The retailer has yet to reap the rewards of its recent acquisitions, which are putting it in a strong position for future international growth.
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