Challenges for Ahold in second quarter

During the second quarter, Ahold USA experienced a dip in sales, while its online grocery operation, Peapod, achieved double-digit sales growth.



Second quarter net sales were €4,408 million, 1.7% lower than last year at constant exchange rates. Identical sales growth excluding gas was down 1.8%, which included the negative impact of the post-Easter week falling in second quarter 2014. The retailer’s overall market share was slightly down, particularly in New England and at Giant Landover, the company stated.



Peapod, however, again achieved double-digit sales growth. The recent opening of warehouse in New Jersey will almost double Peapod’s capacity and will consolidate its position as a top online grocer in the United States, the company stated.



Furthermore, the company improved its Fresh offering across its four U.S. divisions, enhanced the customer experience through more engaged store associates and introduced targeted price reductions. The company stated that it is on track with the accelerated rollout of the program, expanding to an additional 130 stores this quarter, with 320 stores participating by the end of the quarter. It still expects to have the program implemented in more than 50% of its stores by the end of 2014, largely funded by Simplicity cost savings in the United States.



"In a challenging competitive environment, we remain focused on executing our Reshaping Retail strategy and continue to make investments in our customer and value offering, making our stores a better place to shop,” said CEO Dick Boer.



Boer added, "In the United States, the roll-out of our program to improve our customer proposition is progressing well, bringing better quality, service and value to our customers. By the end of this quarter, the program was active in 320 stores and will be rolled out to more than half of our stores by the end of this year. The accelerated roll out of the program, together with our decision to absorb commodity price increases, resulted in an investment in margin that was partly offset by cost savings from our Simplicity program.”