Grocer Ahold pushes suppliers to pass on price declines

(Reuters) - Grocer Ahold Delhaize on Wednesday said it was pressing suppliers to pass on lower commodity prices to benefit shoppers, as it sees food inflation in Europe slowing later this year.

Prices could fall for some items like sunflower oil and eggs in the second half, CEO Frans Muller said.

"We have clear conversations with our vendors to make sure that when commodity prices are coming down, their prices are coming down too," Muller said. "My message is, be transparent and be as fair as you can be when prices are coming down."

Ahold reported a lower operating margin in Europe for its first quarter, due in part to the impact of energy prices, while its margin in the U.S. grew as cost pressures eased there.

Pressure on retailers is growing amid a cost of living crisis: the French government last month warned it would take action against food retailers if they didn't pass on falling prices to consumers struggling to cope with the cost of living.

Muller said he understood the negative sentiment towards food retailers, because supermarkets are the most visible part of the supply chain, but argued the focus should shift to consumer goods companies that have higher profitability.

"We have no room to play with - 2.8% in Europe, that's an extremely thin margin," Muller said.

Consumer goods firm Unilever on April 27 said it expects an operating margin of "at least" 16% in its first half while Nestle expects an operating margin for 2023 of around 17%.

(Reporting by Helen Reid; Editing by Matt Scuffham, Elaine Hardcastle)