Our highlights of 2021
Group highlights
One year, a dozen ways to care
Mega Image’s “12 Acts of Kindness’’ program offers different opportunities each month for associates to engage in their communities and help causes that matter to them and their customers
Leading through our values
Every year, Ahold Delhaize recognizes leaders from across the local brands and businesses for their leadership qualities and how they live our values and serve communities.
Albert Heijn fights food waste with "yesterday's bread"
The team at Albert Heijn has found a way to help keep one popular product from going to waste.
Working together to keep shelves stocked
Teams from our brands in Greece, Serbia and Romania worked across their organizations, with inspiration from other Ahold Delhaize brands, to develop a single new automated system to replenish stocks in their stores.
The network behind U.S. omnichannel growth
The future of retail is omnichannel – and the right supply chain is essential.
Hannaford leads the way to zero food waste
In 2021, Hannaford became the first large-scale supermarket chain in the northeast United States to achieve zero food waste to landfills.
Giving diverse associates a path to growth
Region Director Steve Harfield and Talent Acquisition Manager Kelsey Sloan had big dreams and much success in launching The GIANT Company’s first “Diversity Cohort.”
"During the past two years, our values and purpose have become strong drivers, motivating people across our businesses."
Our brands and performance
413,000
Associates worldwide
55 million
Customers served every week, both in stores and online
19
Great local consumer-facing brands1
7,452
Stores serving our local communities in Europe and the United States2
Net sales for the financial year ending on January 2, 2022, were €75,601 million, an increase of €865 million, or 1.2%, compared to net sales of €74,736 million for the financial year ending on January 3, 2021. At constant exchange rates, net sales were up by €2,382 million or 3.3%.
Gasoline sales increased by 35.1% in 2021 to €901 million. At constant exchange rates, gasoline sales increased by 39.6%, driven by a reduction in pandemic measures during the year leading to an increase in gasoline volumes. In addition, gasoline prices increased considerably worldwide in 2021.
Net sales excluding gasoline increased in 2021 by €631 million, or 0.9%, compared to 2020. At constant exchanges rates, net sales excluding gasoline increased in 2021 by €2,127 million, or 2.9%, compared to 2020. Sales growth continued to be elevated by demand related to COVID-19, yet was also fuelled by improvements in our brands’ business models, including online, and the acquisition of FreshDirect, 71 stores from Southeastern Grocers at Food Lion and 38 stores from DEEN in the Netherlands.
We continued to see strong sales growth in our online businesses, which contributed €7,704 million to net sales in 2021 (2020: €5,547 million). Net consumer online sales amounted to €10,401 million and increased in 2021 by 38.2% at constant exchange rates.
With the launch of online shopping at Albert in the Czech Republic, all our brands now have online operations. The continued increase in online sales was driven by the impact of COVID-19 and consumers shifting to online shopping, as we also saw in 2020. We saw continued positive trends across all the brands with online acceleration in the U.S. supported by more click-and-collect points, third-party delivery and the acquisition of FreshDirect in 2021, and growth in Europe that was mainly driven by the bol.com and ah.nl online brands.
During 2021, we further increased the sale of healthy own-brand products as a proportion of total own-brand food sales to 53.6%. This increase resulted from the introduction of Nutri-Score in our European brands and the U.S. brands’ continuous effort to reformulate own-brand products. Our performance was also supported by the brands’ increased focus on driving healthy own-brand sales
In addition, we have seen that the fresh product category is the fastest growing segment at Food Lion and Delhaize keeps benefiting from its SuperPlus loyalty program, which gives higher discounts on products with a Nutri-Score of A or B.
Operating income in 2021 went up by €1,129 million, or 51.5%, to €3,320 million compared to €2,191 million in 2020. The increase of €1,129 million is mainly explained by the changes in gross profit and operating expenses, which are explained above. At constant rates, operating income was up €1,274 million, or 62.2%.
Underlying operating income was €3,331 million in 2021, down €263 million, or 7.3%, versus €3,594 million in 2020. Underlying operating income margin in 2021 was 4.4%, compared to 4.8% in 2020. At constant exchange rates, underlying operating income was down by €157 million, or 4.5%, compared to 2020. Our 2021 results were mainly impacted by higher logistics and distribution costs, operational expenses, advertising costs and depreciation and rent, driven by supply chain challenges in the U.S. and incremental omnichannel investments accelerating our online business.
Tight cost management remains a core objective of our business model. Our Save for Our Customers program delivered €967 million this year, positively impacting our gross profit and operating expenses. Through this program, we drive efforts to provide our businesses with optimized store processes and improved sourcing conditions, enabling us to continue to invest in our customer proposition.
For more information, see the Performance review section of the Annual Report 2021.
In 2021, net sales were €45,455 million, down by €15 million or 0.0% compared to 2020. At constant exchange rates, net sales were up by 3.6%. Sales growth was positively impacted the acquisitions of FreshDirect and 71 stores from Southeastern Grocers, COVID-19 and inflation, and negatively affected by one fewer week of sales in 2021 compared to 2020. The additional week of sales in 2020 amounted to $967 million.
Online sales were €3,228 million, up by 68.9% compared to the prior year at constant exchange rates. The increase versus last year was primarily driven by the pandemic, as consumers’ intent to shop online continued to increase. The launch of 270 additional click-and-collect points helped the brands’ capture sales from this channel, along with a further strengthening of partnerships with third-party delivery services, the acquisition of the FreshDirect online grocery delivery service and the expansion of e-commerce offerings across the U.S. brands.
In 2021, underlying operating income was €2,150 million, down by €316 million or 12.8% compared to last year. At constant rates, underlying operating income decreased by (8.8)%.
The United States’ underlying operating income margin in 2021 was 4.7%, down 0.7 percentage points compared to 2020. The 2021 sales were positively affected by COVID-19, while supply chain costs were impacted negatively by supply chain challenges in the U.S.. Operating income was further affected by inflationary pressure, lower labor productivity and higher facility transition costs from C&S to our integrated supply chain network.
For more information, see the Performance review section of the Annual Report 2021.
Net sales in 2021 were €30,147 million, up by €881 million or 3.0% compared to 2020. At constant exchange rates, net sales were up by 2.8%. Sales growth was driven by the increased demand related to COVID-19, the acquisition of 38 DEEN stores in the Netherlands and by strong execution of our distribution and store operations. In Europe, the pandemic has had a more mixed impact on the different brands compared to our brands in the United States, and the effect of COVID-19 has been more balanced, with additional sales matching the related costs.
Online sales were €4,477, up by 25.1% compared to last year, mainly driven by the strong performance of our online brands, bol.com and ah.nl. Bol.com experienced strong net consumer online sales growth of 26.6% in 2021. This growth comes on top of the very high growth of 56.8% in 2020. The brand’s business in Belgium and its third-party platform – which currently offers a marketplace to more than 48,500 merchant partners in the Netherlands and Belgium – remain important growth drivers. Other brands also saw a rapid growth in online sales, partially driven by higher demand due to COVID-19, complementing the total online sales growth.
In 2021, underlying operating income in Europe was €1,306 million, down by €19 million, or 1.4%, compared to 2020. Underlying operating margin in Europe was 4.3% in 2021, down 0.2% compared to 2020. In Europe, some of our brands, including those in Romania and our brands’ convenience formats (To Go and Shop & Go), were negatively impacted by COVID-19 to a greater extent, suffering from decreased traffic, the absence of tourists and the trend of people moving from the city to the countryside during lockdown periods. Margins were mainly impacted by higher underlying operating expenses, particularly driven by higher labor, operational and administrative expenses related to COVID-19. To a lesser extent, margins were negatively impacted by the floods in Belgium. This was partly offset by better gross margins driven by lower cost of product and savings from our Save for Our Customers program.
Our net sales in Europe consist of sales to consumers and to franchise stores. Franchise stores operate under the same format as Ahold Delhaize-operated stores. Franchisees purchase merchandise primarily from Ahold Delhaize, pay a franchise fee and receive support services.
For more information, see the Performance review section of the Annual Report 2021.
Our growth drivers
Our Leading Together strategy has served us well for the past three years. Even through the challenges of COVID-19, it has helped us to stay resilient and continue to achieve strong results.
Drive omnichannel growth
Customers interact with our brands at many touchpoints throughout their busy lives – we call this the customer journey. Through our omnichannel offering, our brands are working to provide a seamless experience in all phases of the journey – one that is relevant for local customers and enables them to shop on their terms: when and how they want. It’s part of how our brands help customers navigate the choices they encounter, from planning to shopping to enjoying their meals, and fulfil our purpose of helping people eat well, save time and live better.
Our Omnichannel Customer Value Proposition outlines the seven areas our brands focus on that impact this customer journey. Among these are three where our brands really excel and differentiate themselves: fresh and healthy, local and trusted and personalization.
Elevate healthy and sustainable
We believe that what’s healthy and sustainable should be accessible and available to all. We are working towards this through our “Grounded in Goodness” strategy, that focuses on healthier people and a healthier planet. Grounded in Goodness, officially launched in 2021, is based on the idea that the world’s health crisis and climate crisis are intrinsically linked. We believe that if we get it right for ourselves, we usually also get it right for the planet. And acting responsibly today is imperative to securing a better tomorrow for generations to come.
Our approach ensures the decisions we make are grounded in doing the right thing for people and planet. We collaborate closely with our partners and our brands to empower customers to join this journey with us.
Our brands’ marketing, reward programs and store designs ensure that what’s healthy and sustainable is affordable, accessible and inclusive for all. Teams across the brands innovate to make products even healthier, more interesting and more varied. The brands source locally, help farmers get a fair deal and work with suppliers to improve the food supply chain. Through it all, we are transparent in highlighting our progress and making better choices clear.
All of this helps us to make healthy and sustainable choices into easy choices, for everyone.
Cultivate best talent
Everything we do to create the leading local food shopping experience is enabled by our people. The 413 thousand associates working in our brands’ stores and support offices create relationships with customers and communities – the trust our business is built on.
We are passionate about creating healthy, engaged and inclusive workplaces. We strive to reflect the markets we serve and make sure associates’ voices are heard and valued. We want everyone who works for our brands and support offices to find purpose in what they do, have equitable access to opportunities and be able to grow and contribute to their fullest.
We aspire to a workforce that is 100% gender balanced, 100% reflective of our markets and 100% inclusive.
Strengthen operational excellence
Powered by our continuously turning business wheel, Ahold Delhaize and its great local brands create value through a relentless focus on saving for our customers, driving same-store sales and investing to fund growth. Our operational excellence growth driver is focused on making this wheel turn faster and better all the time.
Our great local brands are outstanding operators, with many decades of experience in running retail businesses and the ability to maintain a steady performance even in the midst of challenging circumstances. They work to continuously improve how they operate stores, distribution centers and home delivery and pick-up operations.
This work is underpinned by our strong operating model: our network of leading local brands supported by service companies that operate at scale and leverage their best capabilities regionally and globally. This is an important part of our competitive advantage, and the key to how we bring our omnichannel customer value proposition to life.
Our operating model enables us to transform quickly and use our scale in a way that balances with the brands’ need to consistently meet the unique demands of customers across our local markets. Through it, we believe that we have developed a repeatable formula for growth in the U.S., Europe and Indonesia.
Our business model
Across Ahold Delhaize, each of our great local brands works hard to save for customers, drive same-store sales and fund growth. Our impact goes beyond what happens in stores and distribution centers: from farming to consumption, our brands work with suppliers and partners to make the value chain more sustainable and provide customers with more of the meals they enjoy each day, and healthier choices to help them live better. We have recently committed to reaching net-zero carbon emissions across our own operations by 2040 and to becoming a net-zero business across our entire supply chain, products and services by 2050.
Many of our brands’ products originate from farms around the world. While Ahold Delhaize does not own or operate farms, our brands have long-standing strategic partnerships with farmers and local producers. The raw materials for own-brand products are sourced from and processed by selected partners to ensure the highest quality.
Our brands work with farmers and suppliers to drive down carbon emissions across the value chain and to protect, restore and sustain forests and other ecosystems.
Our brands’ products are made from raw materials and packaged for sale. The brands’ assortments include own-brand ranges that offer great value across different price points and the most relevant local assortment. Our brands develop them in-house, including branding and marketing, and actively work to reduce plastic and increase the use of recyclable materials in packaging.
They are re-formulating many own-brand product recipes to reduce sugar, salt, colorants and additives, and achieved 54% of own-brand sales from healthy products in 2021. All own-brand products adhere to high standards that support Ahold Delhaize’s ESG ambitions.
Various suppliers manufacture branded products that are delivered to our brands’ distribution centers. Our brands give small consumer packaged goods companies the chance to sell their product innovations in their stores and reach a wider audience. Suppliers can benefit from the unique customer insights resulting from our brands’ strong local presence and over a century of experience in grocery retail. We share our expertise and scale with other food retailers as part of the Coopernic European Buying Alliance and through our partnership with AMS. This enables our brands to improve product quality and buy more efficiently.
Products are delivered to our brands’ warehouses and prepared for transport to stores, pick-up points and customers’ homes. We are continuously adapting our supply chain to serve customers better. Our brands’ automated warehouses and fulfilment centers enable faster distribution to stores and delivery to customers’ homes.
Customers can shop with our brands in stores and online. Ahold Delhaize is known for our great local brands, that serve 55 million customers each week.
Our brands create the leading local food shopping experience in more than 7,000 local grocery, small-format and specialty stores and through online shopping. And our brands sell more than just food – they include the top online retailer in the Benelux, bol.com.
While the majority of our revenue is generated by selling products to customers, growing complementary revenue streams allows us to save and reinvest across the value chain. Complementary revenue streams are driven by digital and in-store media, retail media services and data insights.
Environmental, Social & Governance
ESG performance is an important part of how we measure success at Ahold Delhaize. We have a long history of reporting on our ESG performance and we are pleased to see our stakeholders’ interest in this area continuing to increase.
As the pace of climate change accelerates, there is less than a decade left to ensuring a healthy future. As part of our strategy to support a healthier planet, we measure and manage our company’s environmental impacts relating to carbon emissions, food waste and plastic waste as well as the impact of climate change on our company.
For more information, see the ESG section of the Annual Report 2021.
In addition to building a healthier planet, we focus on healthier people as part of our Grounded in Goodness strategy. Our commitment to healthier people begins with empowering customers and associates to make better choices when shopping with us, in stores and online. We also support resilient communities, everywhere the brands operate. And finally, we work with farmers and suppliers to ensure that they demonstrate a high standard of business ethics and regard for human rights, and that our products are safe, high quality, and produced in clean, safe and efficient facilities with good working conditions. Our social impact goes beyond our Grounded in Goodness strategy and includes topics such as health and well-being; fair labor practices in the supply chain; associate safety, health and well-being; and customer health and safety. We take responsibility for driving positive impact, for example by helping customers and associates make healthy and sustainable choices, by keeping people safe and well during a pandemic and by safeguarding human rights in our brands’ own operations and across supply chains.
For more information, see the ESG section of the Annual Report 2021.
As in every other area of our business, having the right governance in place to ensure we take a structured and effective approach to our ESG ambitions is critical to our success.
We have bold ambitions to become a more diverse and inclusive company, across all our brands and businesses.
For more information, see the ESG section of the Annual Report 2021.
Leading Together
