I am pleased to report that 2008 was another successful year for Ahold. Despite the turbulent economic conditions around the world, we made good progress with our strategy for profitable growth, increased sales and operating income and strengthened our competitive position.
We completed our Value Improvement Program at Stop & Shop and Giant-Landover in the United States, including the introduction of new branding, a new store look and new logos. The program to reinvigorate these powerful local consumer brands has gained momentum. As anticipated, sales performance and margins improved during the year. Giant-Carlisle had another outstanding year and continued to grow and gain market share in a highly competitive environment.
In the Netherlands, Albert Heijn performed exceptionally well again, growing sales and market share and maintaining a strong margin. We also took an important step by selling our 73 percent stake in Schuitema which enabled us to acquire 56 stores, all of which have now been converted to Albert Heijn. In the Czech Republic and Slovakia, we continued our repositioning and rebranding programs. Our operations are not yet where we want them to be and the management focus for 2009 will be to drive sales, cut costs, and close underperforming stores.
It was a challenging year for ICA, our joint venture in Scandinavia and the Baltics. Although sales increased, operating income for the ICA group decreased slightly, primarily because of losses at ICA Norway.
Another major priority for management over the past year has been the implementation of our corporate responsibility strategy. Each of our operating companies worked hard to make a difference for customers, employees, and our other stakeholders in our key focus areas of healthy living, sustainable trade, climate action and community engagement. We have been particularly active in supporting food banks in the United States that distribute food supplies to an increasing number of people in need as a result of the current economic downturn. You can read more about our activities and the hard work of our employees, in our corporate responsibility report.
There were a number of key appointments and management changes made during the year. Mark McGrath was appointed to our Supervisory Board and Lawrence Benjamin, our Chief Operating Officer for Ahold USA, has been nominated to the Corporate Executive Board for appointment at this year’s Annual General Meeting of Shareholders. In July, we appointed Carl Schlicker to be the new President and CEO of Stop & Shop/Giant-Landover and appointed Sander van der Laan from Albert Heijn to succeed him as President and CEO of Giant-Carlisle.
As we look to 2009, the economic environment is dominating the headlines. We believe we are well placed to respond to the effects of recession and rapid changes in consumer behavior. We have a strong balance sheet and we have repositioned our businesses over recent years to give better value to our customers.
Our results in 2008, and the continued progress we are making with our strategy, are due to the hard work and dedication of all our employees, for which I and the Board send our sincere thanks. I am proud of their achievements and confident that with their continued support we will continue to deliver value for our customers and shareholders in the year ahead.
On behalf of the Corporate Executive Board,
John Rishton
Chief Executive Officer
Amsterdam, the Netherlands, February 27, 2009