The last two years have been tough for Ahold, hit first of all by its exposure to the vagaries of Latin American economies and then rocked by a fraud scandal at its US Foodservice division.
A change of management, swiftly followed by a new action plan and an improvement in performance, have gone some way towards restoring some faith in the company's ability to pull itself away from the abyss, but the latest quarterly results show that there is still a long way to go before Ahold can regain some of its former glory.
The Dutch group reported net losses of €405 million in the first three months of 2004, with exceptional items related to disposals pushing it back into the red after profits of €84 million a year earlier.
The disposal of units in Brazil and Asia during the quarter also led to an 11.3 per cent drop in sales compared to the previous year to €15.4 billion, although excluding the impact of currency exchange rates and the disposals, sales growth was a modest, but encouraging, 1.3 per cent.
The performance, though disappointing, was in line with Ahold's expectations, with 20004 always marked down as a likely year of transition as the final phase of the turnaround plan was implemented. But the company was also at pains to stress that the ongoing performance was good, suggesting that it is on the right track to recovery.
But a full recovery will depend on a lot more than simply selling off underperforming units. The company is still highly dependent on its overseas operations, despite exiting both Asia and Latin America, and its US retail business in particular continues to suffer from the weakness of the dollar against the euro.
Furthermore, the business units which Ahold will not divest - in the US, the Netherlands and central and eastern Europe - continue to face tough market conditions, and the group will have to show that its trading style can be adapted to the needs of increasingly price-driven retailing.