Ahold Delhaize announces end to strike action at Stop & Shop, warns on profits

Dutch retailer Ahold Delhaize has warned that full-year profits will take a potential $110m hit after strikes shut down its Shop & Stop estate in New England.

The industrial action affected 246 of Stop & Shop’s 415 American stores, and began after the retailer looked to change take-home pay, healthcare and other benefits.

On Monday, Ahold said it had struck a “tentative agreement of terms” with five local unions, enabling staff to return to work after 11 days on strike. Frans Muller, chief executive, said all sides had reached a “fair and responsible contract in which all Stop & Shop associates are offered pay increases, eligible associates have continued excellent health coverage and eligible associated have ongoing defined benefit pensions benefits.

"I know that both Stop & Shop management and its associates are proud to welcome customers back."

But the retailer warned that the industrial action, while now ended, would have a one-off impact on underlying profits of between $90m and $110m, which it attributed to “lower sales, increased shrink of seasonal and perishable inventory and additional supply chain costs.”

Underlying group operating margin for 2019 is now expected to be “slightly lower” than 2018, while “the percentage growth of underlying earnings per share in 2019 is revised from high single digits to low single digits”.

Group free cash flow, however, was expected to be unchanged at €1.8bn for the full year, which Ahold attributed to the “continued strength of our other US and European brands”.

Shares in Ahold were down more than 3% by mid-morning.