Amsterdam, May 6 - Benelux food retailers Ahold and Delhaize reported quarterly sales above expectations, thanks to a combination of store redesigns, savvy marketing and some market stability.
Amsterdam-based Ahold reported that its first-quarter sales rose 15.2 percent to 8.65 billion euros ($11.6 billion) from a year earlier, compared with a mean forecast of 8.58 billion euros in a Reuters poll of 11 analysts.
Belgian rival Delhaize reported like-for-like store sales growth rose 2 percent in the United States, where it generates 70 percent of its revenue. The figure was better than the 1.6 percent average of 13 analysts' estimates in a Reuters poll.
Both companies have benefited from extensive restructuring in recent years. Ahold revamped its U.S. stores, while Delhaize has gone through cost-cutting to boost its margins.
"They are reaping the benefits in a market that is very challenging and under pressure," said Petercam analyst Fernand de Boer. "Compared to a number of other retailers, Ahold and Delhaize are less in non-food, they have less gasoline sales."
Ahold said in a statement its performance remained solid in Europe and the United States, and it was well positioned "to respond to competition in the current turbulent economic environment".
Delhaize said it was on track to improve its cost structure by 100 million euros and to generate 50 million euros in working capital improvements this year.
By 1046 GMT, Ahold shares had risen 6 percent to 8.74 euros in Amsterdam, while Delhaize was up 4.3 percent at 53.19 euros in Brussels. The DJ Stoxx European Retail index was up 1.2 percent.
Ahold shares are down 10.3 percent and Delhaize shares have fallen 6.3 in the past 12 months, compared with a 25 percent fall in the broader index.
At Delhaize, fourth-quarter Belgian comparable store sales growth was 1.7 percent, against an expected 1.4 percent.
Delhaize, which has a variety of supermarket chains, including Food Lion stores in the United States and Delhaize shops in Belgium, repeated that it saw operating profit growing by up to 3 percent in 2009 at identical exchange rates.
It said that excluding a 53rd week of business in 2008, growth would be between 3.5 and 6.5 percent.
RESTRUCTURING BENEFITS
SNS Securities analyst Richard Withagen said Ahold's results reflected strong returns from Ahold's programme to upgrade its U.S. stores and growth in its home market.
"The strong sales performance should also bode well for first-quarter earnings," Withagen said in a note. Ahorn will publish its full first-quarter results on May 28.
Ahold has benefited from restructuring well before many other food retailers, which are facing a tough economic climate as shoppers cut back on spending due to rising unemployment.
Sales at Ahold's U.S. operation Stop & Shop and Giant-Landover rose 3.6 percent to $5.3 billion. Its other U.S. supermarket franchise Giant-Carlisle reported a sales increase of 3.4 percent to $1.5 billion.
In the Netherlands, where Ahold operates the dominant Albert Heijn chain, sales rose 12.3 percent to 3 billion euros.
There have been some encouraging signs among other large retailers, with Britain's Tesco Plc reporting in April it was seeing signs of stability in some markets.