Ahold moots EUR 350m saving, plan to boost online sales

(THE HAGUE) - Dutch retail giant Ahold announced on Monday a 350-million-euro cost savings plan as part of a six-pillar strategy including a boost for online sales and a dividend increase.

But an Ahold spokesman said the strategy, to begin next year, did not include job cuts for the group which has 3,000 stores in North America and Europe and employs more than 210,000 people.

"We are completing a separate previous programme to reduce costs, the new plan announced today will start in 2012 and will be looking to reduce distribution and logistical expenses," Jochem van de Laarschot told AFP.

"No jobs are being threatened," he said.

The main objective of Ahold's six-point plan was to accelerate growth and make it "even more attractive to investors," Van de Laarschot added.

To do this, the company's plan included expanding online sales and rolling out new stores in Europe, particularly in Belgium, it said in a statement.

"Our online businesses are already the number one online food retailers in the Netherlands and the United States," it said.

"We plan to significantly expand our footprint in the next five years and triple online sales to 1.5 billion euros ($2.01 billion).

Ahold will start testing pick-up points for customers in Europe and the United States from next year which will allow them to order groceries online and pick it up themselves from special locations.

The retailer also planned opening at least 150 new convenience stores in Europe plus an addition 50 supermarkets in Belgium and will look for new opportunities including the United States, where currently 60 percent of its business is being conducted.

Ahold also set a targeted divident payout rate of 40 to 50 percent on normalised net earnings.

Said Van de Laarschot: "This a very important plan. Internally, it gives the group new perspective and externally we hope to attract new investors."

The Amsterdam-based group last week published net earnings for the third quarter up to 257 million euros, thanks to a reversal in a tax provision worth 109 million euros.

The earnings increase related to transactions before 2004, Ahold said.