Dutch supermarket group Ahold Delhaize reported an 8.6% fall in net profits in the first quarter of the year, largely due to the cost of selling its 128 Delhaize stores in Belgium.
Ahold Delhaize, which operates brands including European chains Delhaize, Albert Heijn, Etos and Gall & Gall, saw its net sales reach €21.7 billion in the first quarter, up 0.4% on the same period last year (based on actual exchange rates).
The group's latest financial accounts show that its net income for the quarter was €513 million, down 8.6% compared to a year ago.
The fall in net income was attributed to costs relating to the group's 'Belgium Future Plan', which involved the sale of 128 of its Delhaize stores in Belgium.
'Great progress'
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 a year on independent owners had been found for all 128 stores.
Frans Muller, President and CEO of Ahold Delhaize, said that the sale of Belgian stores to franchisees is one of a number of initiatives the group is taking to simplify the organisation, to sustain growth and innovation.
"One year into the plan, the Delhaize team has made great progress and achieved many significant milestones. In February, Delhaize finalised agreements to franchise all of the 128 own-operated stores. To date, 76 stores have already transitioned to their new owners and we expect that all conversions will have taken place by the end of the year," he said.
He added that Belgian Delhaize stores that have already transitioned to new ownership have yielded "promising results", with customer frequency and basket size trending upwards.
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The group's European sales saw a 4.1% increase to €8.5 billion in the first quarter of 2024, as Ahold Delhaize said it benefitted from a fall off in strike actions in Belgium compared to last year.
Ahold Delhaize reiterated its forecast for 2024: the group predicts an underlying profit margin of at least 4% this year. The company is due to publish a "refreshed strategy" later this month.
Overall, Ahold Delhaize is one of the world's largest food retail groups, with physical and online stores across Europe, the US and Indonesia – employing more than 400,000 staff globally. The company is headquartered in the Netherlands and is listed on the Euronext Amsterdam and Brussels stock exchanges.
