US market still a challenge says Ahold CEO
The company, which operates in the US, as well as in its home market of the Netherlands, said net profit fell 46% to 139 million euros ($176.9 million) from EUR257 million, hit by a EUR90 million tax charge related to Ahold's Scandinavian joint venture ICA, of which it owns 60%.
Revenue rose 11% to EUR7.60 billion from EUR6.86 billion as it benefited from increased sales volumes, but profit fell 3.7% to EUR289 million as the retailer continued to cut prices. Operating margin fell to 4.1% from 4.4% a year earlier.
"We remain cautious in our outlook and expect market conditions to continue to be difficult," Chief Executive Dick Boer said. "We will closely monitor the potential impact of rising food commodity costs, particularly in the United States."
In the U.S., which accounts for 60% of Ahold's group revenue, the company had to cope with tough competition and cautious consumers but price promotions worked and Ahold's U.S. revenue rose 1.9% to $5.89 billion.
Ahold announced a change in U.S. leadership, with board member James McCann becoming chief operating officer of Ahold USA from Feb. 1, 2013, taking over from Carl Schlicker who will retire.
Source: www.marketwatch.com
