ZAANDAM, Netherlands -- Ahold here said last week it is seeking to become "a multichannel food provider," an effort under way in the United States with the company's acquisition of the nation's second-largest food-service company and pending acquisition of an 87-unit convenience store chain in upstate New York.
Ahold also said it expects earnings to be "strongly higher" this year, with earnings per share increasing between 17% and 20%.
In other news, Ahold said:
The potential remains for a large-scale transaction in Europe. "The possibility of a major alliance with a sizable European company is still very much alive," the company said.
In the United States, same-store sales are expected to grow 2%, with total sales growing 7%. Ahold also said it plans to open more than 50 new supermarkets and remodel a further 200. The company said investment in current U.S. business is expected to total $1.1 billion.
It has successfully completed its acquisition of U.S. Foodservice. Cees van der Hoeven, Ahold president and chief executive officer, said, "The acquisition of U.S. Foodservice is a significant strategic step... It elevates Ahold to the position of national food provider in the U.S."
The company speculated on the shape of food retailing at the end of the current decade in its annual report.
Ahold's "store formats will have expanded considerably by 2010 and will range from large, luxurious centers with food, restaurants and freshly made takeout meals to convenience stores that are close to residential areas," the company said. "They will also function as pick-up centers for other services ordered by phone or electronically."
The company said it sees itself in the future serving customers "in locations we can hardly envision now: fuel stations, restaurants, sports stadiums, colleges, hospitals, religious centers -- anywhere people gather on a regular basis."
Jonathan Ziegler, San Francisco-based managing director for Deutsche Banc Alex. Brown, New York, told SN Ahold "is showing some vision here" by moving into the convenience-store and food-service businesses. "There are stomachs you can't service at the supermarket."
In particular, he said, the acquisition of U.S. Foodservice might give Ahold's efforts to sell prepared foods at supermarkets a shot in the arm. "No one is making money off home-meal replacement now," he said. But with some food-service expertise, "Ahold will prove that it can."
Tim Carroll, managing director of the corporate finance group at Arthur Andersen, Chicago, said Ahold's moves into the convenience-store and food-service fields will show its rivals "there need to be decisions made so they can remain competitive."
He added, "It's about getting more and more of the consumable retail dollar. At the end of the day, it comes to leveraging infrastructure and expertise."
The company also discussed a number of other issues, stating:
It plans a global offering of approximately $2.88 billion in Ahold common shares. The proceeds of the offering will be used to finance Ahold's acquisition of U.S. Foodservice, Columbia, Md.; its joint venture with ICA Group, Stockholm; and several smaller acquisitions in Spain and Latin America.
The preliminary prospectus for the offering will be available by May 1, and the offering's subscription period will run from May 1 to 15.
It has received permission from the European Commission in Brussels to complete its 50-50 joint-venture transaction with the ICA Group. The company expects to close the transaction by April 28.
It has suspended discussions with food retailer Jeronimo Martins, Lisbon, about the future of their cooperation until September. Until then, the companies will continue to run their retail business in Portugal jointly.
In Europe, sales are expected to increase 11%. The company said it will open 170 new stores and remodel 400 existing units, and will invest $676 million in its current businesses.
In Latin America, sales are expected to increase 11%. Ahold's joint ventures will open 30 large new stores and remodel another 50 in the region. Total investment in existing operations is expected to total $352 million.
