Dutch grocer Ahold beat forecasts with a 5 percent rise in third-quarter profit as it gained market share and managed to pass on higher food costs to cash-strapped shoppers in its main U.S. business.

Chief executive Dick Boer said on Thursday that was largely because U.S. competitors had also increased their prices, and did not reflect a stronger consumer.

Customers remain cautious in their spending and focus on value in an inflationary environment, he told reporters.

Boer said it was proving more difficult to pass on higher food costs in Europe and that the euro zone debt crisis had dealt a further blow to already fragile consumer confidence.

However, he added that had not yet led to a deterioration in spending, with trading so far in the fourth quarter little different from the third.

Many retailers across Europe and the United States have been struggling as shoppers' disposable incomes are squeezed by rising prices, subdued wages growth and austerity measures.

Belgium's Delhaize , which like Ahold makes most of its sales in the United States, said last week business conditions were getting tougher, while world No.1 retailer Wal-Mart on Tuesday missed third-quarter profit forecasts.

Ahold, which runs Dutch market leader Albert Heijn and makes about 60 percent of sales in the United States, said it made an operating profit of 300 million euros ($406 million) in the 12 weeks to October 9.

That compared with analysts' mean forecast of 291 million.

An exceptional performance in tough conditions, JP Morgan Cazenove analysts said. Crucially ... Ahold noted it had not seen the trend Delhaize pointed to of a weaker exit rate (for third-quarter sales) than an entry rate.

At 0850 GMT, Ahold shares were up 1.9 percent at 9.597 euros, the biggest rise by a European blue-chip stock <.FTEU3>.

STRATEGY DAY

Ahold, with around 3,000 shops in 12 countries, said sales at U.S. stores open over a year jumped 4.5 percent excluding fuel, accelerating from 1.2 percent in the second quarter and beating a forecast of around 2 percent.

Dutch sales on the same basis climbed 3.0 percent, after 2.6 percent in the previous quarter and against a forecast of about 2.4 percent.

The underlying retail operating margin held steady at 4.7 percent, with a rise in the United States offset by a fall in the Netherlands -- signaling the greater difficulty in passing on higher costs in Europe.

Ahold, which runs Stop & Shop, Giant-Landover and Giant-Carlisle in the United States, has outperformed rivals in recent quarters, helped by its strength in more affluent northeast U.S. states and its market leading position in the Netherlands, where it takes about a third of grocery spending.

But its shares trade at a discount to many of them as a multiple of forecast earnings, due to concerns about its exposure to low growth markets.

The group is due to give a strategy update on Monday, when analysts are looking for an update on its growth plans whether in convenience stores, online and non-food markets, or in new territories like Belgium and Germany.

They are also hoping for a more generous dividend policy and an update on plans for mergers and acquisitions, with bidding underway for the Netherlands' No.2 grocery chain C1000 and some analysts suggesting it should look to buy Dutch online non-food specialist Wehkamp.

The shares should be firm in the sector context today given the solid Q3 showing, but we cannot foresee a marked re-rating occurring pending a decisive move in the overall EBIT (earnings before interest and tax) direction of the group, UBS analysts said. ($1 = 0.739 Euros)

(Editing by Jane Merriman)

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