Ahold Delhaize reports stagnant 2021 sales while e-commerce grows: 'We are still facing challenges around product availability and finding enough new associates'
In 2021 (full year ending Jan. 2, 2022), net sales across Ahold Delhaize's portfolio of US retailers -- the company's largest market -- were €45.5bn (US$50.3bn), down by €15 million (US$16.6m) compared to 2020, according to the company's 2021 annual report. Total group net sales across the company increased slightly by 1.2% to €74.7bn for 2021.
While the company struggled to outperform 2020 sales performance, sales growth was positively impacted by the acquisitions of FreshDirect and 71 stores from Southeastern Grocers, while COVID-19 and inflation, and one less week of sales in 2021 compared to 2020, negatively affected company revenue.
"2021 was a strong year for us financially; but, of course, it was in the midst of circumstances we all wish had been different... We are still facing challenges around product availability and finding enough new associates to support our growth that are partially related to COVID-19, but that we expect will remain in a post-COVID era, as well as heightened inflation," stated Ahold Delhaize CEO Frans Muller in the company's annual report.
E-commerce and omnichannel focus
Online sales, however, increased by 68.9% in 2021 vs. 2020 increasing to €3.2bn (US$3.5bn). Ahold Delhaize credited the growth of e-commerce to the addition of 270 click-and-collect locations along with a further strengthening of partnerships with third-party delivery services, primarily the acquisition of the FreshDirect online grocery delivery service and the expansion of e-commerce offerings across the US brands.
Building on the growth in e-commerce and online retail, Muller said that the company is laser focused on creating a seamless omnichannel shopping experience for customers.
"We invested €2.4 billion in the business, to make sure that our brands’ stores are well maintained, to enhance the digital and omnichannel offerings, to upgrade the supply chain and to increase our IT and digital capabilities to make sure our brands can provide even more personalized propositions for customers," said Muller.
"In the US, Stop & Shop is offering customers an enhanced, more personalized offering through its GO Rewards program that lets customers earn points they can redeem for gas savings, dollars off at checkout or surprise deals."
In addition, Giant opened an e-commerce fulfillment center in Philadelphia to help support increase online shopper demand and Stop & Shop is in the process of remodeling 40 of its stores in 2022 to enable a more seamless omnichannel shopping experience.
"In 2022 and beyond, we will step up our investments in digital, automation and state-of-the-art infrastructure to drive innovation and support our accelerated growth plans to 2025," said Muller, who expects low-double digits growing in its e-commerce channel in 2022.
2022 projections: 'I’m confident we will have a solid year ahead'
Looking ahead to the rest of 2022, Ahold Delhaize expects that many consumer behaviors formed during the pandemic will still play a role in customer shopping habits, including food-at-home consumption and increased online food penetration.
"Trends around cooking and eating at home, shopping online and healthy eating have remained and evolved, and convenience continues to grow in importance," said Muller \, who warned of some level of uncertainty moving forward.
"I expect 2022 will be another year of relative uncertainty, as it’s difficult to predict how the COVID-19 pandemic and geopolitical situation in Europe will develop," he said.
"While events keep moving fast, and we are sure to face challenges, I’m confident we will have a solid year ahead. We have a company of brands with loyal customers, with a strong financial base, and with the right strategy to lead us into the future and to keep on growing."
