Supermarket group Ahold Delhaize has posted a remarkable increase in both profits and revenue over the first three months of this year, defying analyst expectations that a series of strikes at its Delhaize stores in Belgium would hit the company's bottom line.
The group also operates the Albert Heijn supermarket chain in the Netherlands, in addition to owning Delhaize stores in Belgium. Its operations extend to several other retailers across Europe, Asia, and the US. On Wednesday morning, the group reported that its net sales over this year's first quarter had risen 9.4% to €21.62 billion – roughly €120 million more than previously forecast by the company, Reuters reports.
Whilst the results were buoyed by strong performance in the US (where its revenue increased by 10.5% to €13.5 billion), Ahold noted that its sales in Europe still increased by 7.5% to reach €8.1 billion. Overall, the company's quarterly operating profit rose 4.2% to €864 million.
Could have been better?
In announcing the results, Ahold reported that strikes at its Delhaize stores in Belgium only made a modest impact on its net European revenue: "Without the impact of strikes, comparable sales in Europe would have increased by 7.7% [instead of 7.5%]," the company said.
"Our strong earnings performance was mainly driven by strong operational performance in the US. This was partly offset by increased energy costs in Europe and the impact of the strikes in Belgium," CEO Frans Muller informed Belga News Agency.
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Muller added that he continued to support Delhaize's plan – first announced in March – to turn the 128 Belgian stores that it currently directly manages into franchises, but admitted that this will "require a lot of courage". He claimed that the decision will enable the group to "better serve customers in the long term".
Delhaize's plan to franchise its stores has led to a series of increasingly militant worker protests over the past couple of months. It has also been vehemently condemned by trade unions, with Secretary of the Association of Employees, Technicians and Managers (BBTK-SETCa) Jan de Weghe denouncing the decision as "an attack on staff".
