Speaking at the Reuters Consumer and Retail Summit, John Woolman, ABN AMRO’s managing director for global industries, gave an upbeat assessment of the retailer’s prospects in the US.
“I look at the US businesses that Ahold has left, they are very strong, they have strong market share and they have a strong consumer franchise,” Woolman said. “I think there is a good prospect of a real resumption of growth in the US.”
Given that it was the accounting scandal at its catering unit US Foodservice in 2003 which caused such a major crisis at the Dutch group, the positive assessment of the US operations will be all the more cheering for executives and shareholders alike.
Last month, Ahold announced it was to sell its US Foodservice division, which represents about a third of group turnover, to two private equity groups for US$7.1bn. The unit accounts for about a third of group sales.
Ahold’s shareholders approved the sale at an Extraordinary General Meeting on 19 June, along with the company’s proposal to return EUR3bn (US$4.03bn) to shareholders by way of a capital repayment and reverse stock split.
The US accounts for a little over 40% of turnover at Ahold, the fourth largest food retail and foodservice group in the world.
Woolman believes European retailers can do well in the US, suggesting that Tesco’s recent entry into the market with its “Fresh & Easy” convenience stores is an indication that the US grocery sector would respond well to such differentiation.