By Dimitri Rhodes
(Reuters) -Supermarket group Ahold Delhaize will continue to cut prices in the U.S. as shoppers look for more bargains on shelves to cope with rising inflation, the owner of Stop & Shop, Giant, Food Lion and Hannaford chains said on Wednesday.
Tariffs on imports imposed by President Donald Trump’s administration and a slowing labour market in the U.S. are expected to drive prices higher, putting pressure on consumers’ budgets.
“I think it’s fair to say that the U.S. CPI (inflation) will still grow … and that means that we have to be even more laser-focused on our value proposition for our customers,” CEO Frans Muller told Reuters.
He drew a comparison to the COVID-19 pandemic times, when Ahold had added a large number of products to cook and consume at home, boosting its sales volume.
“If the out-of-home market is getting more expensive and not in line with budgets of households, people look for at-home consumption good solutions,” Muller said.
Ahold reported a 1.9% rise in quarterly comparable sales in the U.S., where it generates more than half of its revenue. Operating income in the country dropped 9.2% to 531 million euros ($615 million) in the same period.
“We have positive volumes across the U.S. business, which is a positive sign, but we’ve also worked quite hard for that – we invested in price, and in other attributes,” Muller said.
“What it proved is that consumers in the U.S., like in Europe by the way, are more focused on value.”
Ahold, which also operates the Albert Heijn and Delhaize chains in the Netherlands and Belgium, reported a profit margin of 4% for the second quarter. Analysts had expected the same, according to a company-compiled consensus.
It said a strong performance in Europe was offset by the U.S. price reductions, as it reiterated the full-year guidance for 2025.
($1 = 0.8636 euros)
(Reporting by Dimitri Rhodes in Gdansk, additional reporting by Helen Reid, editing by Milla Nissi-Prussak)
