Albert Heijn "crystal" promotion cost grocer big

Ahold's turnover increased by 14.9 percent in the first quarter to 11.3 billion euros. The growth is mainly attributable to a weaker euro and a greater nominal gain from converting revenue in U.S. dollars. The operating margin decreased from 5 to 4.4 percent. The "crystal" promotion launched by Albert Heijn was successful in attracting new customers. But the promotion itself was a large cost burden to the company, Ahold wrote in their quarterly report. It had a negative effect on the group's profit margin. The Dollar-Euro exchange rate is an important component of the Ahold accounting, since the US sales sum up to two-thirds of the company's revenues. Correcting for changes in the exchange rate, the turnover of the group rose only by 1.4 percent. The turnover of Albert Heijn stores increased by 5.7 percent. However, the increase mainly stems from conversion of sixteen C1000 stores and from the opening of ten additional stores in Belgium. In the first quarter, the company had an operating profit of 213 million euros. This is four times as large as one year ago. However, net profit was affected by the settlement the company had to pay in connection with the accounting scandal at US Foodservice in 2003. The Ahold-owned Bol.com and Albert Heijn Online also showed a sales growth of 20 percent.