Royal Ahold woes put Giant Food's future in doubt

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Financial woes at Royal Ahold NV have put the future of Giant Food Inc. in limbo, but retail analysts expect the troubled Dutch retailer to hold on to the Landover grocery chain.

Ahold officials are scheduled to release a strategic plan tomorrow detailing the future of the world's third-largest retailer and its subsidiaries.

Giant, as one of Ahold's successful businesses, would not go under. The only question is whether the Washington area's largest grocery chain would be sold.

"Giant is a high-quality business," said David McCarthy, managing director of food retail research at Citigroup Smith Barney in London. "I would not expect it to be sold."

But Ahold's uncertainty has left some questions.

"[Giants] future is in doubt," said Mark Millman, president of Millman Search Group, a retail consulting firm in Owings Mills, Md.

"Who's going to wind up owning them?" he asks. "It's up in the air."

Dick Baird, president and chief executive of Giant, declined to comment.

Ahold has been under fire since February after inflating earnings for the past three years. Total overstatements of pre-tax earnings are about $880 million, according to an investigation by auditing giant PricewaterhouseCoopers. Ahold's Columbia, Md.-based U.S. Foodservice subsidiary is at the heart of the accounting irregularities.