Latin America
1995 1996 1997 1998 1999
Delivering on gro wth
La Fragua
Bomprego
6 t Sales Latin America
4--
2-
0--
in billions
Latin America proved in 1999 that it is
an area of major growth potential. Ahold
is already an important player in the region
through its joint ventures in the rapidly
growing markets of Brazil, Argentina and
Chile. Ahold is also developing a firm
foothold in other countries including Peru,
Paraguay, Guatemala, El Salvador and
Honduras. Despite turbulent 1999 economic
conditions, Ahold joint ventures saw sales
rise 65% to Euro 3.5 billion, accounting
for approximately 11% of worldwide sales.
Operating results rose 54% to Euro 97
million. In local currency, the increases
were even higher. Throughout the year,
ongoing efforts were made to strengthen
existing business and the groundwork was
laid for servicing Central American markets.
Ahold regards Latin America as an area
of high potential for its activities. In
addition to ongoing autonomous growth
in the coming years, Ahold's strategy,
through its joint ventures, includes the
acquisition of local companies. It is
aware of the consolidation process taking
place and of the need to join forces with
world class players to stay competitive.
During 1999, the company strengthened
its network on the continent, offering the
local customer superior service with
state-of-the-art supermarkets and hyper
markets fully meeting the competition.
Organic growth and in-market acquis
itions both last year and in 1998 have
swiftly positioned Ahold and its joint ven
ture partners as prominent regional food
retailers with considerable opportunities
for development.
Brazil
Headquartered in Recife, Ahold's 50/50
joint venture with its Brazilian partner,
Bomprepo, generated sales of Euro
1.2 billion through 61 supermarkets,
17 hypermarkets and 22 other outlets
in the country's northeast where it is the
leading food retailer. Both formats offer
significant potential for further growth
within the region. The new Bomprepo
hypermarkets in particular appeal to
local customers and do brisk business.
Despite the devaluation of the Brazilian
Real, which impacted consumer purchasing
power, customer count at Bomprepo's
stores was impressive.
The integration of Bomprepo Bahia in
neighboring Salvador and the acquisition
of Petiprepo in May 1999 contributed
positively to the further development
of Bomprepo's presence in northeastern
Brazil. In addition to an extensive refur
bishment program to modernize the
stores in Recife and Bahia, a new
expanded distribution center in Salvador
was completed. The company invested
strongly in promotional efforts, particularly
in advertising through special tabloids,
which helped to enlarge market share.
Bomprepo was able to monitor consumer
buying patterns through its popular
customer credit card, the Hipercard,
which can also be used at 30,000 other
Brazilian outlets. Consumers were also
able to accumulate points to buy catalogue
products with the BomClube card. The
groundwork was laid for a significant
28 Royal Ahold Annual Report 1999
