Ahold Delhaize to close U.S. e-commerce unit, comes out strong in Q4 with jump in online sales

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Ahold Delhaize to close U.S. e-commerce unit, comes out strong in Q4 with jump in online sales

Netherlands-based Ahold Delhaize's online sales boosted strong sales gains for the company's fourth-quarter of 2019. Finishing up the fiscal year with an increase in net sales by 3.1%, the grocery retailer pointed to the strength of its e-commerce as being critical to growth.

Overall, online sales grew by 30% in Q4, with the greatest rise in online sales in its U.S. operations. It said that this is in line with its long term goals to double net consumer online sales, upping the ante to a target of US$7.6 million for 2021.

The report also highlighted the strong performance at Food Lion and Hannaford stores - marking continued performance from last quarter.

This year, the company announced a supply chain transformation initiative in the U.S. in efforts to improve supply chain distribution and reduce costs, said the report. Such is said to have had an impact on the company's consistent performance ending the year.

"We ended the year on a high note, with strong group performance in the fourth quarter. We exceeded our full-year 2019 guidance outlook for underlying earnings per share and met our free cash flow guidance," said CEO of Ahold Delhaize Frans Muller.

On Wednesday, Muller told analysts that Ahold's store upgrades and investments in the U.S. stores - Food Lion and Stop & Shop - is creating results for the company. Ahold USA announced earlier this week that it will be closing its e-commerce unit that reaches grocery customers across Illinois, Wisconsin and Indiana - scheduled to be shut down on Feb. 18.

In the U.S. Ahold's fourth-quarter noted an online sales jump of 42.7% from US$232 million to US$330 million in 2019. The company's operating income decreased by 1.5% and underlying operating margins this quarter dropped by 0.4% to 4.3% compared to last year. Ahold Delhaize said that this reflects a challenging sales environment in its Stop & Shop stores.

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