The Dutch retail group Ahold said Wednesday that its first-quarter profit fell by an annualised 3.1 percent owing to challenging market conditions caused by Europe\'s financial slump. Net profit fell to 282 million euros ($353 million), while sales gained 1.9 percent on a constant exchange rate basis to 9.7 billion euros, the Amsterdam-based distributor said in a statement. The results came in below expectations from financial analysts polled by the Dow Jones Newswires who predicted 9.82 billion euros in sales and a net profit of 305.7 million euros. \"Sales growth in the first quarter was a modest 1.9 percent, reflecting... challenging market conditions,\" Ahold chief executive Dick Boer was quoted as saying. \"As we said before, we expect 2012 to be another challenging year for the retail food industry, with intense competitive activity and consumer spending under pressure due to economic uncertainty, especially in Europe,\" he added. In the United States, where Ahold generates nearly 60 percent of its sales through stores like Giant and Stop & Shop, the Dutch group saw sales increase by 2.8 percent to $7.8 billion. In the Netherlands, where Ahold dominates the large and medium retail sectors with its Albert Heijn, Gall & Gall and Etos networks, sales increased by 1.2 percent in the first quarter, while its core operating margin was at six percent, unchanged from last year. Ahold, which has more than 3,000 stores and employs around 218,000 people in Europe and North America, said it was on track with a programme to cut costs by 350 million euros by 2015. The company said in May that it has completed its acquisition of the leading Dutch online retailer bol.com -- which specialises in selling non-food products in the Netherlands and Belgium -- for 350 million euros. Almost half of all Dutch customers who purchased products online shopped at bol.com in 2011, buying more than 17 million products, Ahold said.