Dutch retailer Ahold needs to readjust its forecasts for the current business year. At this morning’s presentation of its Q4 and full year 2005 figures, Ahold stated that “the financial targets set in 2003 have become increasingly challenging.” The figures quantify this understatement: Ahold expects net sales to grow this year by 2.5-3 per cent (in 2003 it expected a 5 per cent growth) and the 2006 operating margin will be between 4-4.5 per cent (where it originally expected 5 per cent).

“Competitive and operating cost pressures have been greater than expected and the turnaround at certain businesses have been slower than expected”, explains Ahold. The US chain Tops (Northwest Ohio) is underperforming while Ahold's other US operations suffer from “strong competitive pressures”. The targets set for U.S. Foodservice remain unchanged.

In Europe, Ahold’s Central European operations are underperforming. The repositioning at Albert Heijn (Netherlands) and ICA (Sweden) were succesful, Ahold says. Based on this experience, Ahold will drive a ‘value improvement programme’ at Stop & Shop and Giant Landover in the US. Ahold will review its underperforming assets, reduce corporate overhead and look for further cost reductions.

Sales for 2005 were €44.5 billion which is 0.3 per cent lower than in 2004. Operating income declined by 73.1 per cent to €248 million, mainly due to the €803 million charge for the securities class action settlement.