Food Lion is a king among grocery chains in the Southeast and Mid-Atlantic regions where it operates about 1,345 supermarkets under the Food Lion, Bloom, Bottom Dollar, and Harveys banners. About half of the company's stores are in the Carolinas, but it also has outlets in nine other states, including Virginia, Georgia, and Tennessee. Food Lion, which prides itself on extra low prices, has taken a beating from low-cost competitors, most notably Wal-Mart Supercenters, and a weak economy. The company's private-label Food Lion brand products accounts for about 20% of sales. Founded in 1957 as Food Town, Food Lion is the largest US subsidiary of Delhaize America, a subsidiary of Brussels-based grocer Delhaize.
The recent deep recession and weak recovery have reduced personal consumption and led to fierce price competition in the Southeast, Food Lion's primary market. In response, the regional grocery chain is redesigning its stores to make shopping more convenient and to recapture sales from Wal-Mart, which has gained grocery market share in key markets -- including Charlotte, North Carolina -- during tough economic times. At the low end of the market, Food Lion has launched a deep discount, limited assortment grocery store format called Bottom Dollar Food. About 45 Bottom Dollar stores, offering 6,500 to 8,000 branded and private-label products, are currently in operation. (By comparison, a traditional supermarket offers as many as 20,000 products.) The company, which has been converting Food Lion outlets to the Bottom Dollar banner, added 16 Bottom Dollar Stores in 2010, all in the Philadelphia area.
While Delhaize doesn't report the financial performance of its individual US grocery chains, its US arm saw a decrease in sales of about 1% in 2010, while same-store sales across the business fell by 2%. Delhaize cited Food Lion and its Florida-based Sweetbay chain as being hard hit by the difficult economic environment in the Southeastern US.
The company's 65-store Bloom format is designed to offer hassle-free shopping by locating staples and takeout meals (from partners including Boston Market) at the front of the store. Over the long term, the company plans to open as many as 40 Bloom stores in Washington, D.C., as well as stores in Greenville, South Carolina. – less
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