Ahold Delhaize Warns SNAP Cuts Will Drag US Sales Through 2026

SNAP Cliff Drags Ahold’s U.S. Comparable Sales to a Crawl

Ahold Delhaize’s U.S. operations posted comparable-store sales growth of just 0.8% in the second quarter, and the company is pointing squarely at cuts to the Supplemental Nutrition Assistance Program as a major culprit. Net sales rose 1.4% at constant exchange rates to about $15 billion, but the SNAP reduction alone trimmed 40 basis points from the top line — and the company expects the drag to deepen to between 60 and 80 basis points for the full year, lasting through 2026.

The new SNAP work requirements, which took full effect on June 1, are not the only headwind. Deflation in egg prices, pharmacy pricing changes tied to the Inflation Reduction Act and an unfavorable calendar shift collectively siphoned roughly 1.7% from sales growth in the quarter. CFO Jolanda Poots-Bijl stressed that “underneath these factors, our competitive position remains strong,” noting market share gains across most of its U.S. banners.

Yet profitability is under strain. While reported U.S. operating income edged up 0.2% to about $596 million, underlying operating income fell 2.6% and underlying margins contracted by 0.2 percentage points. The company blamed price investments to defend market share, higher utility costs and the indirect effects of rising energy prices.

Amid intensifying price competition across the grocery sector, CEO Frans Muller described the pricing environment as “rather rational.” He pointed to Stop & Shop, where aggressive price cuts drove sales gains and pushed its Net Promoter Score to a record 79%. Private-label penetration crossed 40% for the first time, helped by 200 new own-brand items in U.S. stores. Online sales surged 14.5%, with click-and-collect accounting for nearly half of the digital orders, and dedicated in-store picking spaces are improving efficiency in high-volume locations.

Behind the Headlines: SNAP, Price Wars and the Private Label Shield

The SNAP Headwind and Who It Hits Hardest

The 40-basis-point drag from SNAP reductions is a direct consequence of policy changes that lower the purchasing power of low-income households — a core customer segment for Ahold’s U.S. chains like Food Lion and Stop & Shop. The estimated 60–80 basis-point full-year impact suggests the Q2 figure is not a one-off; it represents a structural headwind that will persist well into next year. For food retailers with a similar demographic mix, this is a warning: SNAP-exposed banners face a sustained sales drag that demand-side promotions alone cannot fully offset.

Price Wars or Rational Competition?

CEO Frans Muller’s characterization of the pricing environment as “rational” may sound like corporate-speak, but it has a concrete basis. Stop & Shop’s aggressive price cuts are delivering higher traffic and a record Net Promoter Score of 79%, meaning shoppers are noticing the value and returning. The rub is that these price investments, combined with rising utility costs, are eating into margins — underlying operating income fell 2.6%. The strategy appears to be: accept near-term margin compression to secure long-term customer loyalty, betting that higher volumes and private-label attachment will eventually restore profitability. So far, the market-share gains suggest the bet is working, but the tension between top-line support and margin health will define Ahold’s narrative over the next two quarters.

Private Label Surge as a Margin Shield

Private-label sales surpassing 40% penetration for the first time is more than a milestone — it’s a structural advantage in a price-sensitive environment. Own-brand items carry higher margins and give Ahold negotiating leverage with national brands. The launch of 200 new private-label SKUs across center store and fresh categories underscores a deliberate push to make private label a destination, not just a cheaper alternative. For competitors who have not yet crossed this threshold, the message is clear: private label is the most reliable counterweight to SNAP-driven demand softness and to margin erosion from branded price wars.

Digital Fulfillment Becomes a Differentiator

Online sales growth of 14.5% — and 20% at Food Lion — shows that digital grocery is not a pandemic-era blip but a durable channel shift. The fact that nearly half of U.S. online orders are click-and-collect points to a hybrid model that is cheaper to operate than home delivery. Ahold’s investment in dedicated in-store picking spaces in high-volume stores tackles two pain points: it shields in-store shoppers from aisles clogged with pickers, and it accelerates order fulfillment. As labor costs remain elevated, such efficiency plays are essential. Grocers that fail to optimize this middle mile will see digital growth become a margin drain rather than a profit driver.

What Grocery Executives Should Do Now

For U.S. grocery operators exposed to SNAP: Build a 60–80 basis-point headwind into full-year 2026 sales forecasts. Reassess the share of private-label SKUs in categories most affected by SNAP spending — these shoppers are acutely price-sensitive and more likely to trade down.

For banners engaged in price-cutting: Pair price investments with concrete customer-satisfaction metrics, as Stop & Shop did with its Net Promoter Score. Without that feedback loop, aggressive pricing can spiral into a margin-destroying race to the bottom that delivers no lasting share gains.

Private label as a margin moat: If own-brand penetration is below 40%, set a target to cross that threshold within 12–18 months. Focus new SKU development on fresh categories like salads and tomatoes, where Ahold has just moved — these are high-frequency purchase items that can build basket attachment.

Online fulfillment efficiency: In stores where click-and-collect volume is high, pilot dedicated picking spaces. Track the cost-per-order and in-store customer satisfaction in tandem; the goal is to make digital growth a contributor to operating leverage, not a source of friction.