Ahold Delhaize Adopts Strategic U.S. Price Cuts Amid Rising Inflation

Ahold Delhaize plans to continue price reductions in its U.S. stores as inflation rises, affecting consumer budgets. The company observed increased demand for home-cooked goods during the pandemic and acknowledges the need to focus on value propositions. Ahold's U.S. sales rose, but operating income fell.

Ahold Delhaize, the parent company of Stop & Shop, Giant, Food Lion, and Hannaford chains, is set to further reduce prices in its U.S. stores amid rising inflation. CEO Frans Muller emphasized the need for a value-focused strategy as tariffs and a weakening U.S. labor market contribute to higher consumer prices.

Drawing parallels to the COVID-19 era, Muller noted that Ahold's increased product range for home consumption enhanced sales, suggesting a shift back to in-home dining as out-of-home options strain household budgets. Despite strong sales volume growth in the U.S., operating income saw a 9.2% decline.

The company's overall strong European performance contrasts with price-driven pressure in the U.S., influencing its full-year guidance for 2025. Ahold's reported 4% profit margin met analysts' expectations despite these challenges.

(With inputs from agencies.)