Sales growth slows down at Ahold

U.S. consumers spend less, hurting owner of Giant

October 26, 2002|By BLOOMBERG NEWS

ZAANDAM, Netherlands - Royal Ahold NV, the world's largest food distributor, said yesterday that sales growth slowed in the third quarter as U.S. consumers spent less in grocery stores. Shares of the Dutch company fell 8.1 percent.

Sales rose 5.8 percent to 16.4 billion euros ($16 billion), helped by the $2.2 billion acquisition of Alliant Foodservice, said spokeswoman Annemiek Louwers. That's slower than the 7.3 percent gain in the second quarter and 22 percent in the first.

The United States accounts for about 60 percent of the sales of the Dutch owner of Landover-based Giant Food Inc. and U.S. Foodservice of Columbia. U.S. rivals such as Safeway Inc. and Kroger Co. are reducing prices in an effort to keep customers from defecting to discounters such as Wal-Mart Stores Inc.

"Things are not going well at Ahold," said Paul van Hastenberg, who helps manage about 2 billion euros at F. Van Lanschot Bankiers, including Ahold shares. "I have some doubts for the short term, especially regarding the U.S."

Ahold shares dropped 1.08 euros yesterday, to 12.25, bringing the decline this year to 63 percent.

In food service, the business of supplying food to restaurants, schools and prisons, sales rose 43.3 percent. Excluding acquisitions, sales at the U.S. food-service unit dropped 6.1 percent.

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