Retail

Ahold Delhaize Hopes To Boost Earnings As It Invests In AI

By Reuters
Ahold Delhaize Hopes To Boost Earnings As It Invests In AI

Ahold Delhaize has announced that it expects to grow underlying earnings per share and increase savings over the 2025-28 period.

It aims to do this as it plans to boost digitalisation, omnichannel experiences and the use of artificial intelligence (AI).

The supermarket group is targeting underlying earnings per share at a high single-digit compound annual growth rate compared to 2024.

Supermarket firms have been struggling to maintain margins as food price inflation eases.

4% Margin

Ahold Delhaize reported an underlying operating margin of 4.1% in 2023.

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Its forecast for the current financial year is at least 4% and it has a target to maintain an average 4% thereafter until 2028.

The chief financial officer of the group Jolanda Poots-Bijil said in a statement, “We are a 4% margin company.”

Following strategy days on Wednesday and Thursday, the group said it expects €5 billion in cumulative savings by applying AI and automation in its logistics, distribution, store operations and back office.

It also expects part of the income to come from steering loyalty-scheme customers towards its apps.

The group said in a statement, “We intend to funnel loyalty customers from physical cards to our digital apps, which should yield a rapid increase in monthly active users were we target 30 million by 2028.”

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‘The Story Won’t End Here’

Ahold Delhaize said its omnichannel approach, which integrates physical stores, apps and websites, results in shoppers spending between 1.5 and 3 times more in the group’s most mature markets.

The group also wants to increase sales of its own brand products to 45% of total shop sales during the three-year period.

It hoped to do this as squeezed shoppers turn to private label as a cheaper alternative to branded products.

President and chief executive officer of the group Frans Muller said, “While our own brands have served a critical role in our growth path so far, I can assure you the story won’t end here post-inflation.”

The group said earlier this month that it was confident volumes would recover later this year as inflation slowed.

Read More: Ahold Delhaize’s First Quarter Results Beat Expectations

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