Once again, The Giant Company earned special recognition in the fourth quarter from its parent company, Ahold Delhaize. The Carlisle giant is at the forefront of Ahold Delhaize’s initiatives in online shopping.
In a statement, Frans Muller, President and CEO of Ahold Delhaize, said: “To advance its omnichannel offerings in the United States, Giant Food has launched online marketplace solution Ship2me, initially offering around 40,000 general merchandise and additional food items. Our US brands also added new click-and-collect locations in the fourth quarter, for a total addition of 270 in 2021.”
“As we enter 2022, we will accelerate our omnichannel investments,” Muller continued. Improving omnichannel productivity also remains a very high priority as part of the commitment we announced at our November Investor Day to achieve fully allocated profitability across the Group’s e-commerce operations by 2025. comes as the global COVID-19 pandemic continues to highlight the importance of strong omnichannel food retail operations that provide consumers with a variety of shopping options, including robust online offerings.
“In this regard, we are proud of The GIANT Company’s new e-commerce distribution center which opened in the Philadelphia market in the fourth quarter. It supports our growth and productivity ambitions for 2022 and beyond.
Ahold Delhaize’s US brands include The Giant Company, Peapod, Giant Food, Food Lion, FreshDirect, Stop & Shop, Hannaford and Martins. Sales in the United States increased by 1.5% at constant exchange rates. Excluding the 53rd week of last year, fourth quarter US net sales increased 9.2%. Comparable sales in the United States excluding gasoline increased by 4.8%.
Adverse weather conditions had a negative impact of approximately 0.2% on comparable sales in the United States in the fourth quarter. Combining growth rates over the past two years, growth was 16.0%, accelerating from 15.3% growth in the third quarter of 2019 and 2020 combined. Brand performance continued to be led by Food Lion, which has now recorded 37 consecutive quarters of positive sales growth.
In the fourth quarter of 2021, the segment’s online sales grew 30.5% in constant currency (cc), driven by the continued expansion of click-and-collect facilities and the acquisition of FreshDirect. Excluding the acquisition of FreshDirect, online sales in the US grew 7.5% cc, building on the significant growth of 128.5% in the same quarter last year.
Underlying operating margin in the United States was 4.4%, up 0.5% at constant currencies compared to the prior year period, driven by reduced costs to COVID-19 and strong cost reduction initiatives.
Besides the United States, Ahold Delhaize operates stores in Europe and Indonesia.
“We ended 2021 on a high note,” Muller observed, “with positive Group comparable sales momentum in the fourth quarter and stable Group margins, positioning us for a good start towards the next phase of our Leading Together strategy. announced last November.
“Our financial results in 2021 significantly exceeded our initial expectations, with positive comparable sales growth for the full year and stable comparable underlying profit over 52 weeks compared to the record results of 2020.”
Group sales amounted to 20.1 billion euros, up 0.1%. Excluding the 53rd week of last year, Group net sales in the fourth quarter of 2021 increased by 6.7% cc.
On a two-year basis, the Group’s growth of 14.2% in the fourth quarter of 2021 and 2020 combined compares to the 12.2% growth recorded in the third quarter of these two years combined.
The group’s underlying operating margin was 4.2% in the quarter, stable compared to the prior year, as sales leverage and strong cost reduction initiatives offset rising supply chain costs and inflationary cost pressures. Underlying profit from continuing operations amounted to 598 million euros, up 6.7% over the quarter.
Underlying diluted EPS of €2.19 in 2021 increased 28.8% from 2019 base and significantly exceeded the company’s original guidance of mid to high single digit growth from 2019. This increase compared to the original forecast comes from strong domestic demand and the Group’s underlying operating margins better than expected at 4.4%, against initial forecast of “at least 4%”.
“Looking back over the past year,” Muller observed, “I am very proud of how associates have brought our values to life in how they have responded to ongoing developments associated with COVID-19 and natural disasters. in our brands’ markets, including major floods in Belgium, tornadoes in the Czech Republic, fires in Greece and Hurricane Ida in the United States Through it all, the associates rose to the challenge of taking care of the customers and communities.
Ahold Delhaize said management remains confident in the company’s ability to grow sales in 2022. Strong sales are expected to result from current trends in consumer behavior favoring more home food consumption and online food shopping, which corresponds well to the omnichannel activity of Ahold Delhaize. model and growth investments.
As supply chain disruptions, inflation and rising costs as well as the expected easing of consumer government subsidies pose challenges for the industry in 2022, Ahold Delhaize Group’s underlying operating margin should be at least 4.0%, consistent with the historical profile of the business. . Management believes that the Company’s brands continue to offer consumers a strong buying proposition and are well positioned to maintain profitability in the current inflationary environment.
The 2022 target is based on €967 million in savings from 2021, which greatly exceeds the initial savings forecast of over €750 million. Underlying EPS is expected to decline low to mid single digits from 2021, primarily due to a return to historical margin levels in 2022 from high levels in 2021.
Net investments are expected to be around €2.5 billion, reflecting an acceleration of the company’s investments in its digital and omnichannel offering to support the accelerated sales growth. In addition, Ahold Delhaize declares that it remains committed to its dividend policy and its share buyback program in 2022. It plans to increase the annual dividend in 2022 to €0.95 per share and has previously announced a share buyback program. billion euro shares for 2022. .