Retail sales were down 2.8 per cent to Eu6.9 billion (£4.6 billion) and turnover at Ahold's US Foodservice fell 3.3 per cent to Eu3.4 billion (£2.44 billion).
According to the company: 'Market conditions remained unchanged. Stop & Shop/ Giant-Landover margins were hit by price investments related to the further roll out of the Value Improvement Program.'
Ahold is rejuvenating its Stop & Shop, Giant-Landover and Giant-Carlisle supermarkets in the US with lower prices, cheaper private-label products and more fresh produce. The Dutch retailer has also put catering supplies unit US Foodservice up for sale.
In December, the Ahold warned of a challenging fourth quarter, because of rising competition and weaker economic conditions affecting its US retail operations.
Ahold owns the Netherlands' biggest supermarket chain, but generates most of its turnover in the US.
For the full year, sales increased 2 per cent to Eu44.9 billion (£29.64 billion), compared with 2005. At constant exchange rates, net sales were up 2.7 per cent.