Federica Mileo and Diana Mandia
(Reuters) – Supermarket group Ahold Delhaize expects to grow core earnings per share and boost savings from 2025 to 2028, it said on Thursday, as it plans to boost digitalization, omnichannel experiences and the exploit of artificial intelligence (AI).
The group, which operates the Stop & Shop, Giant, Food Lion and Hannaford chains in the United States and the Albert Heijn and Delhaize chains in the Netherlands and Belgium, aims to achieve core earnings per share in the high single-digit compound annual growth rate over 2024.
Supermarket companies are struggling to maintain margins in the face of falling food price inflation. Ahold Delhaize recorded a base operating margin of 4.1% in 2023, forecasting 4% or better for the current fiscal year and targeting an average of 4% in the following years through 2028.
“We are a 4% margin company,” said CFO Jolanda Poots-Bijl in a statement.
The group, which held strategy days on Wednesday and Thursday, said it expected cumulative savings of €5 billion through the exploit of artificial intelligence and automation in logistics, distribution, store and back-office operations, while funneling loyalty program customers to its apps.
“We intend to redirect loyalty customers from physical cards to our digital applications, which should result in rapid growth in the number of monthly active users by 2028, where we aim to reach 30 million by 2028,” the group said in its statement.
It said its omnichannel approach, which integrates physical stores, apps and websites, results in shoppers spending 1.5 to 3 times more in the group’s most mature markets.
The supermarket group also wants to augment own-label sales to 45% of total store sales during this period, as hard-pressed customers turn to private labels to reduce their spending.
“While our own brands have played a key role in our growth path so far, I can assure you that this story will not end there after inflation,” said president and CEO Frans Muller during the strategy presentation.
Earlier this month, the group said volumes would augment later this year as inflation slows.
