Ahold USA
0.5%
4.1%
Vl sl CHANT
PeapacT
Performance by segment (continued)
Giant' Stop&Shop- friArtifliTs
Operating income
Market share
continued
to grow
Best in Fresh at Ahold USA
Ahold Annual Report 2012 46 Ahold at a glance
Our strategy
Our performance
Governance
Financials
Investors
Our brands
Our online brands
Highlights of the year
Ahold USA achieved market share gains at all four divisions
Ahold USA demonstrated its competitive advantage and community
engagement in the way it served customers during Hurricane Sandy
in October and the following recovery period
Giant Carlisle acquired and converted 15 Genuardi's stores
Giant Landover acquired and converted two Fresh Green's stores
The divisions relaunched and rebranded most of their own-brand
grocery products, including their Guaranteed Value own-brand
product line. One in five own-brand products were reformulated to
meet higher quality standards
Peapod opened its first eight pick-up points for its customers to
collect their orders
Peapod launched more than 100 virtual grocery stores at high traffic
locations, enabling customers to order by scanning product photos
on billboards with their smartphones
The Stop Shop divisions rolled out ScanIt! Mobile, a smartphone
app enabling customers to scan their groceries, tally their orders,
receive personalized savings and checkout
The divisions continued to operate successful loyalty programs,
particularly Gas Rewards, with nearly eight of every 10 primary
shoppers now participating
Identical sales growth
(excluding gasoline sales)
Underlying
operating margin
Financial results
2012
2011
Net sales millions)
20,112
18,026
Net sales millions)
25,845
25,072
Net sales growth
3.1%
6.6%
Identical sales growth
1.4%
4.9%
Identical sales growth
(excluding gasoline sales)
0.5%
2.9%
Operating income millions)
619
734
Operating income millions)
792
1,021
Underlying operating income millions)
831
769
Underlying operating margin
4.1%
4.3%
Number of employees headcount
(at year end in thousands)
121
117
Number of employees FTEs
(at year end in thousands)
85
82
Contribution to Ahold sales
61.2%
59.6%
Contribution to Ahold underlying
operating income1
55.6%
52.8%
1 Before Corporate Center costs
Net sales
Net sales, at $26 billion, increased by 3.1% in 2012. Identical sales,
excluding gasoline, increased by 0.5%. In challenging market
conditions, all four Ahold USA divisions achieved market share gains in
the supermarket channel. Sales growth benefited from successful
promotions, acquired and new stores, and effective loyalty programs.
Online business Peapod continued to deliver double-digit sales growth
in its existing market area, launched virtual grocery stores and opened
eight pick-up points where customers can drive by and conveniently
pick up their online orders.
Ahold USA achieved an operating income of $792 million, which
was $229 million lower than last year. Operating profit included
$118 million of pension costs related to the settlement of the U.S.
frozen pension plan and $116 million write-down of capitalized
software development costs. Underlying operating profit, at 4.1%,
decreased as pressure on gross margins continued, due to product
cost inflation and a competitive, promotion-driven market.
The divisions were able to compensate for this, to a large
extent, through a more competitive cost base,
and by continuing to focus on operational
improvements and simplification.
Having outstanding Fresh departments is key to building customer
loyalty. The U.S. divisions are working to be "Best in Fresh" among
key competitors in all their markets - as defined by customers
through intensive research. They are creating a "Fresh-centered"
company culture, testing and reformulating own-brand products to
be freshest in the marketplace and creating more powerful and
aligned communications to customers about their Fresh offering.
