Ahold U.S. Banners Fighting Margin Pressure - AMSTERDAM

Ahold here on Friday said it would accelerate introductions of its value improvement program in its Stop & Shop and Giant-Landover banners after reporting that weak economic conditions and increased competitive activity led to a "very tough" fiscal third quarter and expectations for more of the same for the fourth quarter.

Ahold here on Friday said it would accelerate introductions of its value improvement program in its Stop & Shop and Giant-Landover banners after reporting that weak economic conditions and increased competitive activity led to a "very tough" fiscal third quarter and expectations for more of the same for the fourth quarter. Identical-store sales fell by 1.3% at Stop & Shop (1.8% excluding gasoline) and by 0.5% at Giant-Landover during the quarter, officials said. Giant-Carlisle posted a 4.8% identical-store sales gain, but Tops' ID sales fell by 6.2%. Profits as a percentage of sales at all four banners suffered as well, prompting officials to predict that overall annual margins would be at the low end of prior estimates of 4% to 4.5% of sales. Overall quarterly profits of $278.5 million increased 7.5% from a year ago, excluding the effect of a lawsuit settlement in the year-ago period. Overall quarterly sales of $13.7 billion increased by 0.7%. Ahold stock was down by nearly 3% Friday.