Ahold Delhaize, the parent company of Delhaize supermarket chain, reported a boost in sales and underlying profit in the second quarter of the year as the company is starting to benefit from the sale of its Belgian stores to franchisers.
In an update published on Wednesday, Ahold Delhaize reported group net sales of €22.3 billion in the second quarter of the year, up by 1.2% compared to the same period in 2023. The company saw double digit growth of 9.3% in online sales in the second quarter, driven by online grocery sales.
The company, which operates brands including European chains Delhaize, Albert Heijn, Etos and Gall & Gall and US brands such as Food Lion and Stop & Shop, reported an underlying profit margin of 4.2% in the second quarter, and a total underlying profit of €933 million.
The supermarket operator noted a "strong performance" in both the US and Europe in the second quarter. Ahold Delhaize also said that it is "starting to benefit" from structural changes to its business, including the Belgium Future Plan which involved the sale of its 128 Delhaize stores in Belgium to franchisers.
When the sale of the Belgian supermarkets was first announced in March 2023, it led to fierce protests among staff and numerous union actions, but by February of this year independent owners had been found for all 128 stores.
In the latest company update on Wednesday, company president and CEO Frans Muller confirmed that 108 Delhaize stores in Belgium have now been sold, with remaining sales to be completed by the final quarter of this year.
"At Delhaize Belgium, to date, 108 stores have been transitioned to their new owners, and we expect that conversions will be completed in quarter four. The improved customer experience has already resulted in Delhaize's market shares exceeding preannouncement levels," he said.
"In addition, the higher sales leverage and change in operating model, along with overriding the impact from last year's strikes, have contributed to the recovery of underlying operating margin in Europe, which reached 3.7%," he added.
Across Ahold Delhaize's European operation, net sales grew by 4.3%, to €8.8 billion. The company said that sales growth (excluding gasoline) was 2.4%, despite the negative impact of ending tobacco sales in all of its Albert Heijn stores at the start of 2024.
Ahold Delhaize affirmed its outlook for 2024, predicting an operating profit margin of at least 4%.
