Ahold said food price disinflation and the effects of lapping a sales boost related to Hurricane Sandy led to a 2.1% decline in U.S. sales and in non-fuel identical-store sales for the fiscal fourth quarter.
U.S. sales totaled $6 billion for the quarter. Comparable-store sales, excluding fuel, decreased by 2%, and market share dipped slightly, reflecting the effect of Hurricane Sandy last year when Ahold was able to reopen stores faster than many of its competitors in the Northeast.
For the fiscal year, U.S. sales increased 1.1% to $26.1 billion. Non-fuel identical sales increased by 0.3% for the year.
While the Amsterdam-based retailer said it expects a cost-reduction program will protect margins for the quarter, analysts at Morgan Stanley said the “disappointing” sales performance will likely require the company to invest more aggressively in price and lead to compressed margins in the current fiscal year.
“Today’s ID sales decline reinforced our belief that Ahold’s U.S. pricing is not competitive (as evidenced by our and third-party price surveys) and that Ahold will be required to narrow the gap,” Edouard Aubin, the Morgan Stanley analyst, said in a research note.
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