Boar’s Head Recall and Store Closures Eat Into Ahold Delhaize Sales
Grocery giant Ahold Delhaize saw quarterly sales dip amid product recalls and store closures.
The company’s quarterly earnings, released Thursday (Nov. 7), showed net sales in the U.S. of $14.49 billion, a 0.1% decrease, 1% at the actual exchange rate.
Impacting the company — whose brands include Giant and Food Lion — were its divestment of FreshDirect last year and a drop in gasoline sales.
Meanwhile, comparable sales in the U.S. dipped amid the closing of 32 of the company’s Stop & Shop stores, and the mass recall of Boar’s Head deli meats following a deadly Listeria outbreak.
“Improvements in technology and innovation are also supporting robust growth in online sales in both regions, driven by double-digit growth in online grocery sales, excluding the divestment of FreshDirect,” Ahold Delhaize President and CEO Frans Muller said in the earnings release.
“We continue to see strong growth in both our pick-from-store and third-party marketplace channels. Over the past 12 months, we have opened over 70 new pick-from-store locations in the U.S.”
In addition, Muller said, shoppers have responded positively to Ahold Delhaize’s collaboration with DoorDash, with orders tripling between the first and third quarters.
PYMNTS spoke earlier this year with Bobby Watts, SVP executive lead at Ahold Delhaize’s AD Retail Media arm, about shoppers’ declining loyalty to specific brands thanks to the economic climate and the rise of digital.
“They’re not as brand loyal as they used to be. … I think it’s [because of] two things. I definitely think that economic pressures are causing consumers to make choices … based on price or promotion or value,” Watts said. “But we also see … the younger generation has grown up in a world where everything is instantaneous, and things are moving at such a fast pace, that they’re willing now to experiment more and test different brands, whereas the other demographics may not be as apt to do so.”
In fact, shoppers are changing their grocery purchasing habits in response to cost pressures, with research by PYMNTS Intelligence showing that 36% of consumers have traded down from their go-to grocery products to less-costly versions of them in response to inflation.
Research also shows that grocery buyers tend to show more affinity toward merchants than products, with 53% saying that they are more loyal to merchants than products, and just 35% expressing more loyalty to products than merchants.
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