Delhaize America sees slight Q1 sales gain
SALISBURY, N.C. — First-quarter revenue for Delhaize America, the U.S. sector of the Delhaize Group, which includes such supermarket banners as Food Lion and Bottom Dollar, experienced a 0.1% increase to nearly $4.7 billion, the company reported.
Comparable-store sales for the quarter ended March 31 dropped by 0.3%, but marked a continued trend improvement for the third consecutive quarter. Operating profit for the quarter decreased by 13% to $216 million, which was attributed to an increase in selling; general and administrative expenses as a result of new stores contribution; more store remodels; higher repair and maintenance expenses; fees for increased electronic payments in the United States; and costs related to specific projects, such as the common procurement initiative and expenses related to strategic sales building initiatives at Food Lion and Bottom Dollar Food. These expenses partly were offset by continued cost savings.
Commenting on the financial results, Delhaize Group president and CEO Pierre-Olivier Beckers said that the company is on track to achieving its goals and that its U.S. operations would relaunch the Food Lion banner in the Raleigh, N.C., and Chattanooga, Tenn., markets.
As part of the relaunch, the banner also will be involved in several sales building initiatives, such operational enhancements as staffing and process improvements, product handling and replenishment improvements in the produce department, increased SKU counts, improved price positioning, and an easy and convenient shopping experience. Over the next months, Food Lion closely will monitor the success of these initiatives in order to ensure that both markets will provide valuable learnings for the upcoming rollout in the rest of the network to begin in 2012, Delhaize said.
“Today, we have relaunched around 200 Food Lion stores in the Raleigh and Chattanooga markets that will serve as phase one of the fundamental repositioning work focused on the brand elements of price, assortment and shopping experience," Beckers said of the company's U.S. operations. "Helped by what we learn from this first phase, we will roll out the repositioning work to the large majority of the Food Lion network by the end of 2012.”
By the end of the quarter, Delhaize America operated 1,635 supermarkets, eight locations above the year-ago period.
Delhaize America recently appointed Don Hodge as its CEO.