Belgian food retailer Delhaize "Le Lion" has one big cub -- Delhaize America. With some 1,625 supermarkets and discount grocery stores in 17 states from Maine to Florida, the holding company is the third-largest supermarket operator on the East Coast. Banners include: Food Lion (some 1,075 stores located mainly in the Carolinas and Virginia, but also in eight other eastern seaboard states); the Hannaford Bros. supermarket chain (about 180 stores in New England and New York); and 70 Harveys supermarkets. The grocery operator's Sweetbay chain does business along the west coast of Florida. Delhaize America provides shared services for all of its banners. Delhaize Group established its US subsidiary in 1999.
As its name suggests, Delhaize America rings up 100% of its sales in the US. While the chain does business in 17 states along the East Coast, its biggest presence is in the Southeast. More than three-quarters of its stores are located in the Carolinas, Florida, Georgia, and Virginia.
Food Lion is the largest banner in Delhaize's portfolio of supermarkets. With more than 1,000 stores from Delaware to Florida it represents about two-thirds of Delhaize America's store count, and presumably accounts for the majority of its sales. (The company does not break out sales for individual chains.) The company's Sweetbay (formerly Kash n' Karry) chain ranks third in Florida, far behind market leader Publix. (Delhaize plans to shutter about a third of Sweetbay stores by mid-February 2013.) Bottom Dollar Food (launched in 2005), is the company's limited-assortment discount format. Its no-frills stores offer about 7,000 products, including meat and produce, at some 55 locations in five states. Reid's Stores in the company's smallest banner with about a dozen stores in South Carolina.
Delhaize America rang up $19.2 billion in sales in 2011, an increase of about 2% vs. 2010. Same-store sales grew by less than 1% amid challenging economic conditions, especially in the Southeast (Delhaize's primary market). Still, the modest growth in 2011 was an improvement over recent years when the company struggled with declining annual sales comparisons, despite a larger store count. The deep recession in the US and ensuing weak recovery have led to fierce price competition among grocers. Two of Delhaize America's weakest performers -- Food Lion and Sweetbay -- operate in the Southeastern US. As a result, Food Lion and its sister chains, including Hannaford Bros., have been cutting prices -- at the expense of profits --to remain competitive.
Fixing Food Lion is a top priority for Delhaize America. The chain has seen its sales and customer traffic decline due to drifting prices and a substandard offering of fresh products and service. To that end, in May 2011 it launched a "rebranding" program, which included lowering prices and improving service, aimed at revitalizing the struggling chain. Over the next 15 months the company rebranded more than 60% of Food Lion stores. The rest are due to be rebranded by the end of 2012. Also, in early 2012 Delhaize America announced the closure of 126 stores, most of which are Food Lion supermarkets. Included in the closures are half a dozen Bottom Dollar Food (BDF) limited-assortment supermarkets. Nevertheless, the company believes has plans to open hundreds of BDF stores in the coming years. With money tight, shoppers are turning to less expensive private-label goods. To capitalize on the trend, the grocery chain launched a three-tier private label program in all of its US stores: Value-priced offerings under the Smart Option brand name; mid-tier house brands; and premium items under the Taste of Inspirations name. Sales of private-label goods across the company's banners averaged 27% at the end of 2011 (up from about 17% in 2007).
Delhaize America is 100% owned by Brussels-base Delhaize Group. – less
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