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WRAPUP 2-Ahold, Delhaize show resilience, Carrefour flags

Published 01/16/2009, 05:10 AM
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* Ahold Q4 sales 6.6 billion euros, at top end of forecasts

* Delhaize Q4 sales 5.4 billion euros, beat forecasts

* Carrefour posts slower growth after Thursday market close

* Delhaize, Ahold shares jump 8 pct, Carrefour lags

(Adds analyst comments, updates shares)

By Aaron Gray-Block and Antonia van de Velde

AMSTERDAM/BRUSSELS, Jan 16 (Reuters) - Two of Europe's top grocers reported solid sales growth on Friday, boosted by a stronger dollar, a focus on low prices and limited exposure to non-food sales, which have been hit by the economic downturn.

Robust fourth-quarter updates from Dutch group Ahold and Belgium's Delhaize contrasted with France's Carrefour, the world's second-biggest retailer, which said after Thursday's market close that sales growth had almost ground to a halt in its fourth quarter.

Ahold and Delhaize's shares both jumped more than 8 percent in early trading, while Carrefour initially fell, before recovering in a firmer market.

Retailers worldwide are struggling as shoppers curb spending amid rising unemployment and fears of a deep recession.

No.1 retailer Wal-Mart cut its fourth-quarter profit outlook last week.

Both Wal-Mart and Carrefour have been hit by weak non-food sales as shoppers rein in spending on non-essential items.

Carrefour, which issued a profit warning last month, said late on Thursday that its fourth-quarter sales rose just 0.7 percent, or 1.9 percent at constant exchange rates.

Ahold and Delhaize both have less exposure to non-food sales and have worked hard to keep prices low.

Ahold, the world's seventh largest grocer, said fourth-quarter net sales rose 5.9 percent at constant exchange rates to 6.6 billion euros ($8.8 billion), at the top end of analysts' forecasts.

Delhaize, which like Ahold makes more than half its sales in the United States, said fourth-quarter net sales rose 10.3 percent at constant exchange rates to 5.42 billion euros, above analysts' average forecast of 5.35 billion.

"The key difference between these two and Carrefour is they are trading pretty well in their domestic markets and also both of them have posted surprisingly resilient performances in the U.S. market ... whereas Carrefour is clearly suffering in the French hypermarket sector," said Bryan Roberts, global research director at Planet Retail.

However, he questioned whether Ahold and Delhaize would be able to sustain their solid U.S. performances amid darkening economic storm-clouds. Data on Wednesday showed U.S. retail sales dropped 2.7 percent in December.

TOUGH TIMES

Both Ahold and Delhaize showed signs of tougher trading.

The rise in fourth-quarter sales at Ahold, which employs 142,000 people in 6,500 wholly-owned or joint venture stores across 11 countries, was below the 6.9 percent achieved for 2008 as a whole.

Delhaize's fourth-quarter growth was above the 5.6 percent for the year as a whole, but it described an "uncertain economic environment" and unveiled plans for 100 million euros of cost savings in 2009, some of which it will invest in lower prices.

Both firms also benefited from the stronger dollar. Sales growth including currency changes was 12.9 percent at Ahold and 15.8 percent at Delhaize, which employs 138,000 people in more than 2,500 stores across seven countries.

Growth in like-for-like sales -- which compares revenue from the same stores in local currencies -- at Ahold's U.S. stores broadly beat forecasts. Growth at its Stop&Shop, excluding gasoline, rose 4 percent, beating the average forecast of 3.4 percent.

But growth slowed more than expected at Ahold's Dutch supermarket chain Albert Heijn, with like-for-like sales growth of 5.2 percent missing the average forecast of 6.1 percent.

Delhaize reported fourth-quarter comparable store sales growth of 2.9 percent in the United States, where it makes about 70 percent of its revenues with chains like Food Lion and Hannaford, beating analysts' average forecast of 2 percent.

"Year-end sales in particular were strong and the trend in number of transactions turned positive again when compared to the two previous quarters," Chief Executive Pierre-Olivier Beckers said in a statement.

Comparable store sales rose 2.7 percent in Belgium, also topping analysts' average forecast of 1.9 percent.

Delhaize repeated its 2008 forecasts and announced capital spending of 600-620 million euros for 2009, including the opening of between 71 and 81 new stores.

It will close 7 underperforming Sweetbay stores in the United States and its four loss-making German shops.

At 0845 GMT, Delhaize shares were up 6.9 percent at 46.21 euros, off an early high of 47.095. Ahold was up 6.2 percent at 9.05 euros, off an early high of 9.23. Carrefour was up 2.3 percent at 26.55 euros, off an early low of 25.46. ($1 = 0.7536 euro) (Writing by Mark Potter in London, editing by Karen Foster)

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