Ahold profits from retail recovery

21 August 2009

AMSTERDAM: Dutch retailer Ahold says it is going shopping for other companies as it reported second quarter profits that beat analysts' expectations.

The company, which operates Albert Heijn supermarkets in the Netherlands and Stop&Shop, Giant-Landover and Giant-Carlisle stores in the US, reports profits before interest and tax up 26% at €295 ($420m, £255m) after stripping out last year's sale of its stake in Dutch rival Schuitema.

Separately, further evidence has emerged of the recovery in UK retailing with retail sales rising 0.4% in July over June, which itself showed a revised rise of 1.3%. The annual gain for 2009 now stands at 3.3%.

Clothing and footwear sales rose 10.3% from the same period last year and furniture and electrical goods, blasted by the recession, also sold strongly.

Ahold came under pressure from investors three years ago to sell its US interests after racking up €6bn ($8.5bn, £5bn) debt. Its debt now stands at €1.2bn ($1.7bn, £1bn) and it says it is ready to expand.

"In a recession the strong will get relatively stronger and the weak will get relatively weaker," says chief executive John Rishton. "We're one of the strong and will seize opportunities that will inevitably arise in this kind of market."

"I'm convinced that some more consolidation is going to take place in our industry and we're well-placed to take advantage of that."

Data sourced from FT, BBC Online; additional content by WARC staff