Dutch grocer Ahold reported a steeper-than-expected decline in fourth-quarter sales, as the U.S. food market contracted and customers in the Netherlands spent less per visit to its shops.
The group, which makes three-fifths of its revenue in the United States, said on Thursday sales fell by 4.2 percent, or 1.1 percent at constant exchange rates, to 7.47 billion euros ($10.2 billion).
That compared with analysts' expectations averaging 7.76 billion euros, with a range of 7.43 billion to 8.41 billion, in a Reuters poll.
Ahold shares were trading down 3.5 percent at 12.70 euros at 1043 GMT, making them the second-weakest performers of Europe's 300 largest blue-chip stocks .FTEU3 and shedding gains of the past four weeks.
Sales had been expected to decline a year on from the boost due to Hurricane Sandy, which struck northeastern U.S. states in late October 2012. Consumers stocked up with provisions before the wind and rain struck and Ahold's outlets were also among the first to reopen after the storm.
However, the group, which operates the Stop&Shop and Giant chains from Virginia to Massachusetts, said like-for-like U.S. sales excluding fuel declined by 2.1 percent in October to December quarter - more than analysts' forecasts for a decline of less than 1 percent and compared with an increase of 0.6 percent in the previous three months.
U.S. food retailing has relatively few truly national players, but competition is fierce from more general merchandiser Wal-Mart (WMT.N) and discount and convenience chains.
Kroger Co, the biggest U.S. supermarket operator, last month took a cautious stance on business at the close of 2013, with a cut in food stamps for lower-income families taking effect and reduced spending on discretionary items.
Ahold said the U.S. food market overall had contracted, without elaborating. Analysts say more cash-conscious consumers are keen to cut waste by buying only what they need and stocking up less.
A series of U.S. retailers have reported sparse sales or have cut earnings forecasts as they engaged in the most promotional holiday season since the recession, trying to outdo one another with deep discounts to lure shoppers.
"For the U.S. market conditions are tough, but they (Ahold) are also losing some market share," said Fernand de Boer, retail analyst at Petercam.
Ahold said its underlying U.S. operating margin would be broadly in line with the performance during the rest of the year, supported by a cost reduction program. It did not give a figure, but will when it issues full-year results on February 27.
In the Netherlands, where Ahold operates the market leader Albert Heijn chain, identical sales fell by 1.0 percent after dropping by 0.2 percent in the third quarter.
The group said Albert Heijn's market share dipped, as it had in the third quarter, but that the underlying operating margin should be slightly higher.
"For the Netherlands, there is no inflation and the market is tough.... They benefited always from impulse buying, but shoppers are sticking more to their shopping list and some are trading down," de Boer said.
Despite tough condition, the Ahold shares benefited last year from plans to return 3 billion euros to shareholders by the end of this year.
Belgian peer Delhaize (DELB.BR), which has a large U.S. presence, will release its sales figures next Thursday.
