Amsterdam, July 21 - Dutch consumer spending is still robust but is expected to ease as jitters from the credit crisis and slowing economic growth start to feed through, a senior official at food retailer Ahold said on Monday.
Dick Boer, Ahold chief operating officer for Europe and the brains behind its hugely successful Dutch supermarket chain Albert Heijn, said Dutch consumers had yet to feel the squeeze.
"A lot of people are still working. On the income side, I don't think people feel it," he told Reuters in an interview.
Earlier this month, French supermarket group Carrefour, Britain's Marks and Spencer and Belgium's Delhaize sent a chill through the retail sector after they said cash-strapped shoppers were trading down to cheaper products.
Shares in Ahold, which makes just over half its sales in the U.S., have fallen 14.7 percent since the start of the year versus a 31.4 percent drop in the DJ Stoxx retail index on concerns a slowing U.S. economy would hurt earnings.
World number seven food retailer Ahold makes 28 percent of its annual sales in its domestic market but earns half of its operating income from Albert Heijn.
Soaring food and fuel costs, concerns about the housing market and anxiety about inflation have also spooked consumers across the Atlantic. Last week, U.S. grocer Safeway Inc cut its full-year same-store sales forecast.
Boer said Dutch consumers so far have had fewer concerns about job security and unemployment.
The Dutch jobless rate remained flat at 4 percent in the April-June period, unchanged from the March-May figure, according to Statistics Netherlands data. Unemployment in the euro zone was 7.2 percent in May, Eurostat data showed.
Last month, second-largest Dutch food retailer Super De Boer said consumer spending was still resilient despite official forecasts of slowing economic growth.
But Boer said Dutch shoppers were not expected to remain unscathed for long.
"There will come a moment when you will see more consumer reaction than today. Such as more trading down to cheaper products, maybe less variety," he said.
Albert Heijn, which repositioned itself in recent years with price cuts, more private-label products and a low-price range, is well-equipped to cope with a more brutal retail environment, he said.
"Private label products is one way of saving money. Our private label products, including fresh products, makes up over 50 percent of our products. Excluding fresh products it is about 30 percent," Boer said.
With a market share of about 30 percent at end-2007, Albert Heijn is still keen to expand its share, even at the expense of margins, said Boer.
"If a company tells you it doesn't care about market share, it's out of the business in five years' time. You need to focus on market share to grow. In retail you only play one game: it's growth, if you stop growing, you have problems," he said.
"You need higher volume, and you need sometimes to sacrifice margins."
Asked if Albert Heijn, which analysts said would benefit from taking over Super De Boer, would acquire rivals to add to its more than 700 supermarkets, Boer said: "We are always open to opportunities."