Grocer Ahold Ups Share Buyback as Recovery Beckons
Dutch grocery chain Ahold quadrupled a share buyback to 2 billion euros ($2.6 billion) on Tuesday to redistribute excess cash following the sale of a stake in Swedish retailer ICA.
The group will complete the buyback by the end of 2014 . First quarter net income rose almost sevenfold on the capital gain from the divestment, the company said, to 1.95 billion euros from 285 million euros a year earlier.
The group said it was observing a tentative recovery in the United States, where it operates the Giant and Stop&Shop stores, but warned consumer spending remains under pressure.
"We see on both sides of the ocean and more of course in Europe continuous pressure on consumer spending. We continue to be cautious on the economic environment," Dick Boer, the CEO of Amsterdam-based international supermarket operator told CNBC.
"In the U.S. we have seen some first signs of recovery, but we also know that the supermarket business is not first place that the consumer will start spending more, they will spend first in durables," he said.
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