Dutch grocer Royal Ahold NV warned that first quarter sales growth would reflect the difficult economic environment after a slow start to 2012 as a weak domestic economy and high fuel prices in the United States constrained consumer spending.
Ahold, which owns leading Dutch supermarket chain Albert Heijn and makes about 60 per cent of its sales in the United States, said shoppers would remain cost-conscious, and competition in the food retail industry was likely to be intense.
“We’ve seen slower growth in the first couple of weeks,” Dick Boer, chief executive, told reporters on Thursday after Ahold announced a slightly weaker-than-expected fourth-quarter operating profit.
“We anticipate sales growth in the first quarter will reflect the difficult economic conditions, as well as the timing of Easter. We expect 2012 to be another challenging year for the food retail industry”.
Official government forecasts on Thursday showed the Dutch budget deficit will remain above European limits until 2015 and state debt will rise further in the absence of policy change, highlighting the need for extra spending cuts. The Netherlands has been in recession since July 2011 and the Dutch parliament on Wednesday warned of the possible loss of the Netherlands’ triple-A credit rating.
In the United States, high fuel prices are keeping a lid on consumer spending, Boer said. Boer said Ahold would take further steps to improve its capital structure by investing in growth, including through acquisitions.
He reiterated Ahold wants to expand in the United States and Europe, but would also consider acquisitions in those high-growth emerging markets with a high population density and where Ahold could exploit its business models.
Earlier this week, Ahold said it would acquire bol.com, the biggest non-food online retailer in the Netherlands, for 350 million euros ($468.20 million), expanding its internet store front to include books, DVDs and toys.
Bol.com, which started in 1999, is the most-visited retail website in the Netherlands with 3.4 million active customers, and had total net sales of 355 million euros in 2011.