Taubmann of parent company Albert Heijn: “Earnings in Europe are under pressure, look at the facts” | Economy
Explaining the quarterly numbers, Ahold Delhaize CEO Frans Mueller punched himself. Albert Heijn’s parent company is being criticized for its high profits and turnover, while consumer prices are constantly rising. Mueller does not believe that the image of a greedy multinational corporation is justified. “Look at the facts. Our profit margins in Europe are under pressure.”
Mueller issued a “call to analysts and journalists” to properly explain the financial results to the public. The supermarket company’s sales volume increased by 9.4 percent to 21.6 billion euros, and net profit increased by 7 percent to 593 million euros, but Mueller wanted nothing to do with a supermarket company that made its money at the expense of customers.
He pointed out again and again that three-quarters of the profits are made in the United States. The Dutch supermarket company owns the majority of the stores there, which is also helped by the strong dollar. “I hope people look at the facts,” said Mueller, who was eager to explain the financial results.
In Europe, profit margins are down 20 percent from a year ago and are now just 2.8 percent, “paper thin” according to Mueller. A profit margin of around 4 percent is considered good by Ahold Delhaize. “This is a huge handicap,” Mueller says. “I am really worried about the earnings development in Europe.”
Ahold Delhaize threatens to become the national chief of the Jut, mainly because of the high prices in the supermarket. Mueller could not say when prices would fall again. In the Netherlands, Albert Heijn suffered from strikes in distribution centers, as a result of which shelves in a number of supermarkets became increasingly empty. Now a new collective labor agreement has been concluded, as a result of which employees will benefit 10 percent. Meanwhile, the term acquisition inflation, often referred to as Ahold Delhaize, is also used. Multinational corporations will raise prices more than inflation requires.
Müller wanted nothing to do with it: “The Graiflation system is not a problem for us. It is a pity that this picture has arisen,” he noted, pointing to still high prices for raw materials and energy. He called on everyone to take a closer look at the financial numbers. To prevent a big scene.
It now appears that Albert Huygen’s reputation has been affected by all the upheaval. According to Fernand de Boer, who has been following Ahold Delhaize for Degroof Petercam for years, this is completely unjustified. Ahold Delhaize does not break down the quarterly and annual numbers for each supermarket formula. As a result, it remains unclear how much Albert Heijn earns. Albert Heijn will earn a little more than other Dutch supermarkets. They are the largest, have the most purchasing power and can spread costs across many stores. They set prices in the Netherlands.”
But to say the profits are excessive, de Boer thinks the recording is cheap. “Margins from suppliers like Unilever or Heineken are higher. A profit margin of a few percent is necessary to keep investing and paying for salary increases. In the case of Ahold Delhaize, you don’t just have to look at Albert Heijn, but at the whole company.”
Private labels are still popular
Mueller believes his company has to stay in good shape financially so it can continue to invest in sustainability, for example. “Our main task is to provide affordable food,” he said. As Mueller often does, he again achieved high profit margins with food suppliers. According to him, they are 10 to 20 percent more than Ahold Delhaize uses. Because Ahold Delhaize is “at the end of the chain”, the supermarket company will be the main focus.
The supermarket company says private label brands are still as popular as ever. He also referred to a savings program that would generate one billion euros in terms of cost. Strikes at distribution centers had no impact on the first quarter numbers. But during that period, Delhaize stores in Belgium suffered strikes from angry employees who did not want to transfer these businesses to franchisees. According to an analyst from Degroof Petercam Bank, this costs around €100 million in turnover. Müller could not confirm this, nor could he report how much money the Dutch strikes cost.
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