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Interview with Dick Boer, CEO Ahold Delhaize, from the World Economic Forum 2017

Following are excerpts from a CNBC interview with Dick Boer, CEO Ahold Delhaize, from the World Economic Forum 2017 with Carolin Roth.

CR: Congratulations on your numbers today and the stock is up nicely and analysts point out that this is on the back of the outperformance in the US market. Is this what's driving your business right now?

DB: Yes the most important part of our business is the U.S. Sixty five percent of our business. Although also the Netherlands had a very good performance but in spite also on the U.S. side I would say it was an overall 2.8 percent growth of the total business in the fourth quarter. We grew also in the U.S. was 2.2 percent in our dollars American business which was ?? America and still working in a deflationary environment so I think it is a good result for our U.S. business yes.

CR: I want to pick up on that comment, the deflationary environment because back in Nov the reaction to your Q3 numbers was very different to what we are seeing today. Essentially you talked about the weakness in prices the deflationary environment and a lot of pressure on some of the biggest stores in that country, are you seeing any easing of that aggressive pricing which is coming primarily from Walmart?

DB: The fourth quarter we saw a similar deflation, by the way something is coming from pricing most of it coming from commodity deflation in the U.S. market that will cycle as we expect during the second quarter third quarter. So we are hoping that deflationary environment will ease a bit yes.

CR: Will it ease or can it even tip into an inflationary environment where you are in a position to raise prices because what economists are expecting is a pickup in inflation under Trump's policies?

DB: First of all of course we first have to cycle from deflation to at least neutral and then inflation. I don't think it will be easily to pass through higher prices because we are in a competitive market. We know that in food retail and we are ready for that also. So I'm not expecting a reasonable short time inflation numbers. Of course when the whole U.S. markets are growing that would help us also a bit yes.

CR: When I talk to business leaders here in Davos about Donald Trump's expected policies everyone is quite optimistic when it comes to the tax cuts when it comes to the growth prospects, when it comes to the jobs that could potentially be added. Do you share some of that optimism and are you hoping to add more jobs in the US ?

DB: Well first of all of course optimism is good for customers and that we see overall in the world and also in the United States. First it has to be proven. The president will only be in the White House tomorrow as of tomorrow. He has a lot of plans which hopefully also delivers higher growth and more income for our customers and that hopefully we will see back in more spending in our stores. Of course food has to compete with all other means customers can spend on, so nonfood, general merchandise. But of course as the economy starts growing people start spending a bit more confidence, having more confidence then also of course our business will benefit from that.

CR: You've done pretty well with the integration of the merger of Delhaize. You're now a $25 billion dollar company with $60billion in sales. Are you looking to add on to that potentially even in a promising market like the US?

DB: This year for us is very important to do the further integration. We started the integration work last year. We have to do a lot of work this year and we continue to do that. Of course we will continue to look around where we can let's say use our skills and capabilities to grow the business. But first and foremost today is focusing on integration I can tell you.

CR: Talk to me a little bit about Europe after all it still makes up 40% of your sales. You're not present in the U.K. And I would've liked to talk to you about that but it seems like you wouldn't have a problem of a marmite gate because simply you're not suffering from the depreciation of the pound but talk to me about Germany about the Netherlands your home market, how healthy is the consumer there?

DB: No I must say we've seen also in the fourth quarter good results in the Netherlands 6.6 percent growth driven not only by food retail but also by our online business. Our investing heavily in innovation and new online tools and technology as well in the United States as well in Europe we see that back our customers like that as well in the Netherlands. Certainly also in New emerging market we see more appetite for better food products better supermarkets and we believe that with European economy hopefully also getting some traction. Forget Brexit for a while. Focus on Europe. That's where our business is and hopefully we'll see also some traction here.

CR: What about the rise of populism that has been showing itself through the Trump election, through Brexit, couldn't you see a Trump moment in the Netherlands?

DB: Well the politics is of course always difficult to predict. Also in our markets although the difficulty I think, the difference in the Netherlands is it's a wide consensus model of different parties always to form a government. So it will be different in a way. So we'll see the elections. I'm still quite confident also in the Netherlands that we'll find a way to build again on the on the good economy we have been delivering. And the current government has been delivering a good economy position at this moment so that's also seen in the customer confidence.

CR: Thank you so much for that. Appreciate it. Thank you.