Frequent readers may remember that in a prior life I worked for Food Lion the largest of the Delhaize banners, so I follow the goings on in Salisbury pretty closely. The latest announcement on Thursday from Delhaize America was that revenues have fallen nearly 3% to $4.7 billion.
Same-store sales also dropped 3.6%, compared with the year-ago period. During the first six months of 2010, operating profit of Delhaize’s U.S. segment decreased by 12.8% to $459 million. The announcement included the reveal of the new Delhaize corporate savings plan Delhaize Group will form single procurement organization for its US operations, which will combine all Delhaize America’s buying functions into a stronger and unified entity, Delhaize said. The new organization will support the US banners with assortment and promotions planning and execution, sourcing and procurement, Private Brand management and pricing expertise. The corporate speak does not reveal the impact on the Food Lion corporate headquarters in North Carolina, the Hannaford headquarters in Maine or the Sweetbay headquarters in Florida. I can only assume that it will lead to further layoffs and restructuring. Hopefully this will create a stronger organization that learns from the historic frugal and profitable operations of Food Lion and the grocery and food expertise of Hanaford. Over the last few years the Belgians have seemed to favor the staff in Maine with it culminating in the exit of Food Lion president Rick Anicetti earlier this year. All of the banners have something to offer let’s hope Delhaize can combine them and in the process discover the next evolution of great food retail, that focuses on feeding my family.
“The U.S. economic environment remains very challenging, especially in the Southeast and Florida, and consumer behavior is characterized by prudent spending and cherry-picking. Private Brand penetration continued to increase compared with last year at our U.S. operations,” the company said in its financial release.