(52 1
weeks) 1
Albert Heijn Arena results
Net sales
and 10 of the 31 eastern New York stores planned for
divestment were closed or sold in 2005.
Identical and comparable sales at Giant-Carlisle increased
primarily as a result of consistent growth in net sales per
transaction, driven by successful customer loyalty
programs, ongoing effective pricing and promotional
activities. The number of transactions at identical Giant-
Carlisle stores decreased by 3.3% in 2005 compared to
2004. This decrease was primarily a result of a lower
shopping frequency because of a trend of increased trip
consolidation. Furthermore the impact of net sales of
gasoline had a favorable impact on identical sales
because gasoline prices had a higher rate of inflation in
2005 than food prices. Excluding net sales of gasoline,
identical sales increased by 2.6%.
Identical and comparable sales at Tops decreased,
primarily caused by a weak economic environment and
strong competition in the northeast Ohio region. Net sales
per transaction at Tops remained stable in 2005
compared to 2004.
Market share for Giant-Carlisle increased to 29.5% in
2005 from 28.5% in 2004 mainly as a result of strong
identical sales growth and store openings. Market share
for Tops decreased to 23.8% in 2005 from 26.0% in
2004 mainly as a result of the portfolio rationalization
program and an increase in competitive pressure.
Operating income
The following table sets forth information relating to
operating income for the Giant-Carlisle/Tops Arena in 2005
and 2004:
2005
2004
In millions, except
percentages
Change
(53
weeks)
Net sales in EUR
4,989
(4.2)
5,209
Net sales in USD
6,201
(4.3)
6,480
Operating income in EUR
72
(36.8)
114
Operating income in USD
92
(35.2)
142
Operating income in USD
as a percentage of net sales
1.5%
2.2%
Change in gross profit
margin
0.4
Change in operating
expenses as a percentage
of net sales
(1.1)
The arena's operating income decreased in 2005
compared to 2004, primarily as a result of higher
impairment losses at Tops, especially in the northeast
Ohio region. This decrease was partly offset by improved
net sales at Giant-Carlisle.
The arena's gross profit margin increased as a result of
continued improvements of inventory shrinkage, product
mix, merchandising and operational efficiencies.
Operating expenses in 2005 included non-current asset
impairments of USD 85 million, a goodwill impairment
loss of USD 17 million and gains on the disposal of
property, plant and equipment of USD 24 million. In
2004, the arena's operating expenses included an
addition of USD 11 million to the loss reserve for self-
insurance for the U.S. operations. In addition, 2004
included non-current asset impairments of USD 33
million and an intangible assets impairment loss of
USD 5 million relating to software. Excluding these items,
operating expenses as a percentage of net sales were
higher in 2005 compared to 2004, mainly due to higher
IT, consulting and utility costs, as well as lower net sales.
The arena's operating income in 2005 compared to 2004
was negatively impacted by the additional week in 2004.
In 2006, the arena expects to continue its portfolio
rationalization program at Tops.
The following table sets forth net sales, store counts and
sales area information for the Albert Heijn Arena in 2005
and 2004:
2005
2004
In millions, except
percentages, store count
(52
Change
(53
and sales area
weeks)
weeks)
Net sales in EUR
6,585
2.6
6,418
Change in identical sales 1
3.7
Change in comparable
sales 2
4.1
Company-operated stores 3
994
983
Franchise stores 3
657
645
New stores
45
33
Replacement stores
29
24
Remodeled stores
124
133
Closed stores
22
29
Sales area in thousands
of square meters 3, 4 934 930
Net sales as a percentage
of consolidated net sales 14.8% 14.4%
1 The identical sales in 2005 are compared to 2004 identical sales (52 weeks in
2005 and 52 weeks in 2004).
2 The comparable sales in 2005 are compared to 2004 comparable sales (52 weeks
in 2005 and 52 weeks in 2004).
3 At year-end.
4 The sales area in thousands of square feet in 2005 and 2004 was 10,052 and
10,015, respectively.
AHOLD ANNUAL REPORT 2005 69
