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Ahold to sell US supermarkets

By Anita Awbi , 07-Jul-2006

Dutch retailer Ahold has said it will sell 46 Tops supermarkets in the American state of Ohio, as falling sales continue to impact profits.

Tops Markets are positioned under Ahold's Giant-Carlisle banner that currently operates 119 Tops and four Martin's Stores in New York, Pennsylvania and Ohio.

Ahold has been working on an American restructuring programme to review underperforming divisions within the company for some time and it is believed the latest divesture plan is related to these activities.

 

William Blair and Company has been assigned to coordinate discussions with potential buyers.

 

Overall the division hit sales of $1.8bn (€1.4bn) in the first quarter of 2006, down 5.6 per cent on last year, with sales at Tops falling 6.5 per cent. Operating income was down $2m at $49m.

 

The firm will shave off its 46 most uncompetitive stores in the north of Ohio state saying the "geographically separate region is no longer considered a core part of Tops market area, which is concentrated in New York and Pennsylvania". It will hold on to 74 Tops stores in these key areas.

 

Ahold has been suffering erratic US performance for some time and is taking steps to shed unprofitable divisions in a bid to strengthen overall operations.

 

Earlier this year the food retail and food service group said it will reduce its US Foodservice subsidiary workforce by around 2.4 per cent, and last year the firm sold its Southeastern supermarket chains Bi-Lo and Bruno's.

 

Meanwhile retailers in the Netherlands have enjoyed strong sales throughout June after many consecutive months of market stagnation.

 

Market research group GfK said Wednesday that supermarket sales rose 5.3 per cent during the month, helped by the World Cup tournament in neighbouring Germany.

 

Extra sales of €41m in the weeks of the world cup were recorded, as warm weather also helped to boost consumer spending.