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Delhaize to sell Bottom Dollar to Aldi

Delhaize Group announced Thursday in Brussels that it has signed an agreement to sell Bottom Dollar Food’s 66 store locations in the greater Philadelphia and greater Pittsburgh markets to Aldi for approximately $ 15 million.

The transaction, which includes Aldi’s assumption of associated lease liabilities, is expected to result in an asset impairment and other charges for Delhaize Group of approximately $ 180 million.    

All stores are anticipated to remain open as Bottom Dollar Food stores until year-end. After that time, Bottom Dollar Food will close the stores and retire the banner´s operations. The transaction is subject to customary closing conditions and is expected to be completed by the end of the first quarter 2015.    

“I would like to thank our Bottom Dollar Food associates for their hard work and dedication to their customers,” said Frans Muller, president and CEO of Delhaize Group. “The divestiture of Bottom Dollar Food further simplifies our business, increases debt capacity and creates shareholder value. Today´s announcement is consistent with our strategy, announced in March, of investing in and focusing on our core markets.”

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Gallery: New Kroger, Delhaize America executives and other trending stories

Video: Analyst foresees some Walmart ‘cannibalization’

BB&T Capital’s Andrew Wolf, in this video shot during SN’s 2014 Analysts Roundtable, says it’s “too soon to say” how Walmart’s new focus on its Neighborhood Markets will affect the performance of its Supercenters, but he does expect some “cannibalization” to occur. He also discusses Whole Food Market’s move toward more competitive prices, and its increased competition from Mariano’s, Sprouts and others, plus convention retailers with greater emphasis on natural/organic.

See the full video

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Strikes in Belgium shut down Delhaize stores: Reports

More than 100 stores owned by Delhaize in Belgium were unable to open Friday after employees at the company called a wildcat strike to protest the retailer’s proposed restructuring, reports said.

Warehouse workers walked off the job Thursday after union representatives received word of a proposal from Delhaize that would save jobs but eliminate pay for worker breaks and reduce leave, reports said.

The proposal was revised from a June restructuring plan that would have eliminated around 2,500 jobs and close 14 stores.

Delhaize officials have said the company is beset by a higher cost structure than its peers in Belgium, as detailed in this slide at right presented at the retailer’s most recent financial conference call in August.

Striking workers reportedly have blocked the entrance to two Belgium warehouses.

The below Tweet from a Belgian news site shows a photograph of striking workers wearing a sign that translates to “We are all on sale.”

Delhaize officials were not immediately available for comment Friday. One newspaper said a spokesman said the disruption “will have huge economic repercussions for the company.”

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Strikes in Belgium shut down Delhaize stores: Reports

More than 100 stores owned by Delhaize in Belgium were unable to open Friday after employees at the company called a wildcat strike to protest the retailer’s proposed restructuring, reports said.

Warehouse workers walked off the job Thursday after union representatives received word of a proposal from Delhaize that would save jobs but eliminate pay for worker breaks and reduce leave, reports said.

The proposal was revised from a June restructuring plan that would have eliminated around 2,500 jobs and close 14 stores.

Delhaize officials have said the company is beset by a higher cost structure than its peers in Belgium, as detailed in this slide at right presented at the retailer’s most recent financial conference call in August.

Striking workers reportedly have blocked the entrance to two Belgium warehouses.

The below Tweet from a Belgian news site shows a photograph of striking workers wearing a sign that translates to “We are all on sale.”

Delhaize officials were not immediately available for comment Friday. One newspaper said a spokesman said the disruption “will have huge economic repercussions for the company.”

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Strikes in Belgium shut down Delhaize stores: Reports

More than 100 stores owned by Delhaize in Belgium were unable to open Friday after employees at the company called a wildcat strike to protest the retailer’s proposed restructuring, reports said.

Warehouse workers walked off the job Thursday after union representatives received word of a proposal from Delhaize that would save jobs but eliminate pay for worker breaks and reduce leave, reports said.

The proposal was revised from a June restructuring plan that would have eliminated around 2,500 jobs and close 14 stores.

Delhaize officials have said the company is beset by a higher cost structure than its peers in Belgium, as detailed in this slide at right presented at the retailer’s most recent financial conference call in August.

Striking workers reportedly have blocked the entrance to two Belgium warehouses.

The below Tweet from a Belgian news site shows a photograph of striking workers wearing a sign that translates to “We are all on sale.”

Delhaize officials were not immediately available for comment Friday. One newspaper said a spokesman said the disruption “will have huge economic repercussions for the company.”

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Delhaize America names new CIO

Delhaize America said Monday it has named Michael Laurenti chief information officer, effective Nov. 17.

He succeeds Deb Dixson, who announced her retirement earlier this year.

Laurenti will be responsible for all information technology and information security operations for the Salisbury, N.C.-based company, a division of Brussels-based Delhaize Group.

He previously worked in information technology for Belk Department Stores, Monroe, N.C.; Family Dollar Stores, Charlotte, N.C.; Linens ‘N Things Clifton, N.J.; and Toys R Us, Wayne. N.J.

According to Kevin Holt, CEO of Delhaize America, “Mike brings a wealth of information technology leadership to Delhaize America, and we look forward to tapping into his extensive experience to propel our U.S. operations forward, enhance service in our retail stores and leverage technology to better serve our customers.”

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Delhaize mum on Bottom Dollar sale speculation

Delhaize officials had no comment on a published report suggesting the retailer was seeking to sell its Bottom Dollar Food discount division.

Food World based its report on unidentified retailers who’d been sent “deal sheets” late last month.

“Consistent with established policy, our company does not comment on rumors or speculation regarding plans to acquire or divest businesses,” a Delhaize spokeswoman told SN Tuesday.

Delhaize operates 66 “soft-discount” Bottom Dollar stores in the greater Philadelphia and Pittsburgh markets. Although the company briskly expanded the concept between 2010 and 2013, new Delhaize CEO Frans Muller has shifted investment to core U.S. brands Food Lion and Hannaford, and has said Bottom Dollar needed to prove it could be profitable before deciding on next steps.

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Delhaize Belgium CEO to resign

Delhaize Group said Wednesday that Dirk Van den Berghe was resigning from his role as CEO of the retailer’s Belgium and Luxembourg division effective July 31.


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Van den Berge said he was leaving to accept a new role outside the company. He becomes the third high-level executive to depart the company since Frans Muller was appointed group CEO in September. U.S. CEO Roland Smith departed upon Muller’s appointment, and Europe CEO Stéfan Descheemaeker resigned a month later.

“I want to thank Dirk for his significant contributions to Delhaize Group and wish him well in his future endeavors. Our operations in Belgium and Luxembourg have a dedicated and capable management team that is well-equipped to address the challenges we face and to build on opportunities we have to improve our business,” Muller said in a statement.

“It was a tough decision to leave but I feel this new opportunity is best for me and my family at this point in our lives,” Van den Berghe said.

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Delhaize revamps store brands

The operator of Hannaford and Food Lion stores will roll out a larger and more robust collection of store-branded products for its mid-tier private label and will rename and reintroduce the value tier currently known as My Essentials, Frans Muller, the international retailer’s new CEO, said in a conference call. CONNECT WITH SN ON TWITTER Follow @SN_News for updates throughout the day. The changes to private label are part of a decisive and decidedly dispassionate set of new …

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Delhaize revamps store brands

The operator of Hannaford and Food Lion stores will roll out a larger and more robust collection of store-branded products for its mid-tier private label and will rename and reintroduce the value tier currently known as My Essentials, Frans Muller, the international retailer’s new CEO, said in a conference call. CONNECT WITH SN ON TWITTER Follow @SN_News for updates throughout the day. The changes to private label are part of a decisive and decidedly dispassionate set of new …

Why Subscribe To SN Digital Access?

Digital Access gives you unlimited online access to our most premium news and analysis such as Delhaize revamps store brands. This includes in-depth stories and insights from our team of editors and guest writers as well as free eNewsletters, blogs, real-time polls, archives and more. In addition you will also receive a complimentary copy of SN’s salary survey sent to you by email.

Click here to read the FAQ page if you have any questions (opens in a new window)

Attention Paid Print Subscribers:  While you have already been granted free access to SN we ask that you register now. We promise it will only take a few minutes! Or visit your profile and add your print magazine account number and zip code.

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Supermarket News

Delhaize revamps store brands

The operator of Hannaford and Food Lion stores will roll out a larger and more robust collection of store-branded products for its mid-tier private label and will rename and reintroduce the value tier currently known as My Essentials, Frans Muller, the international retailer’s new CEO, said in a conference call. CONNECT WITH SN ON TWITTER Follow @SN_News for updates throughout the day. The changes to private label are part of a decisive and decidedly dispassionate set of new …

Why Subscribe To SN Digital Access?

Digital Access gives you unlimited online access to our most premium news and analysis such as Delhaize revamps store brands. This includes in-depth stories and insights from our team of editors and guest writers as well as free eNewsletters, blogs, real-time polls, archives and more. In addition you will also receive a complimentary copy of SN’s salary survey sent to you by email.

Click here to read the FAQ page if you have any questions (opens in a new window)

Attention Paid Print Subscribers:  While you have already been granted free access to SN we ask that you register now. We promise it will only take a few minutes! Or visit your profile and add your print magazine account number and zip code.

Already registered? here.

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Muller outlines new priorities at Delhaize

Delhaize’s new CEO on Thursday detailed decisive new priorities for the international retailer, shifting resources toward building back market share and profitability at its Food Lion and Hannaford brands, and — for now — stepping away from a previous strategy to grow a new discount banner.

Frans Muller, who took over as CEO in November, said his plan would emphasize consumer-centric positioning and market share gains, delivered with efficiency and speed. He said investment in 2014 would be allocated to core properties, while operations with less share and/or profit potential — including the fledgling Bottom Dollar discount banner — will face review.

In the U.S., the plan will result in assortment changes and store format evolution at Food Lion, where price and service investments over the past three years have delivered new sales momentum but “the overall improvement in customer perception has not been enough,” Muller said.Delhaize CEO Frans Muller

At Hannaford, price investments will continue and the Hannaford To Go Internet shopping option will be accelerated with 10 new click-and-collect points to be added this year. Both chains will see revamped private label programs. Muller said the changes are part of an effort to stabilize profitability following years of investments designed to spark sales momentum and stem market share declines at its core U.S. banners.

“It’s obvious that Delhaize Group has to address a couple of real issues,” Muller said. “Our profitability at Delhaize America and Delhaize Belgium has eroded in recent years. It’s to a high degree self-inflicted as we had to step up our price investment and promotional activities in order to maintain our market share and improve our revenue performance.”

Muller’s remarks came as the retailer reviewed financial results for the fourth quarter and fiscal year.


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Muller detailed how the recently completed brand repositioning at Food Lion has stemmed market share and volume losses, but noted the Southeast chain still lags competitors in terms of sales per square foot and share of its shoppers’ overall food spend. To address this the chain is implementing a switch from what Muller described as vendor-driven to customer-driven assortments in center store that will result in a 50% turnover in assortments at stores.

Of 19,000 SKUs reviewed in center store departments, 6,700 items will be discontinued and 3,330 new items added, for an 18% reduction overall, Muller said. These changes are rolling out gradually at Food Lion, with around half of the project to be completed by year-end, Muller said.

Muller said the assortment changes would not harm margins, as the loss of manufacturer rebates would be made up for with a more relevant consumer selection and by an expansion of higher-margin private brands.

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Delhaize drives Q4 sales gains

Delhaize Group said Thursday that sales volumes at U.S. banners Food Lion and Hannaford increased during the fourth quarter, despite a deflationary environment.


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Total sales in the U.S. increased 2.6% to $ 4.3 billion in the quarter, with comparable-store sales increasing by 2.8% despite the effect of negative inflation of 0.4%. The sales growth was sparked in part by price investments and increased promotions. Performance was especially strong at Food Lion, where the company has now completed a program of repositioning stores with lower everyday prices.

For the full year, Delhaize generated U.S. revenues of $ 17.1 billion, an increase of 1.9% over 2012, supported by comparable-store sales growth of 2%. The company will release earnings for the quarter and fiscal year on March 13.

“In the U.S., where volume growth continued to be positive, we were especially pleased with Food Lion’s momentum,” Frans Muller, Delhaize’s president and CEO, said in a statement. “The phase repositioning, started almost 3 years ago, is meeting our expectations and we look forward to further develop Food Lion’s customer proposition this year.”

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Delhaize, Safeway achieve top diversity scores

Delhaize America said Tuesday that it received a perfect score of 100% on the 2014 Corporate Equality Index (CEI), a national benchmarking survey and report on corporate policies and practices related to LGBT workplace equality, administered by the Human Rights Campaign Foundation. Safeway, Pleasanton, Calif., also achieved a 100% ranking, according to CEI.


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“Delhaize America is honored to earn this top recognition again this year,” said Millette Granville, director of diversity and inclusion for Delhaize America, Salisbury, N.C. “This perfect score reinforces our strong commitment to creating a diverse and inclusive environment for associates. Through employee resource groups and volunteer support, we are building a more inclusive company and stronger communities.”

The 2014 CEI rated 934 businesses in the report, which evaluates LGBT-related policies and practices including non-discrimination workplace protections, domestic partner benefits, transgender-inclusive health care benefits, competency programs and public engagement with the LGBT community. Delhaize America’s efforts in satisfying all of the CEI’s criteria have resulted in a 100% ranking and the designation as a Best Place to Work for LGBT Equality.

In all, 304 companies achieved a perfect 100% score. Other food retailers ranked in the CEI index included Supervalu (which scored 90%); Kroger (85%); Whole Foods Market (75%) and Ahold USA (55%).

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Hansen Resigns From Delhaize Board

BRUSSELS — Delhaize Group said Friday that Jean-Pierre Hansen will resign from its board of directors, effective June 30.


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“It is with deep regret that I leave this board. My commitments in the energy sector and different additional duties that I have assumed since I joined the Delhaize Group Board in 2011 are requiring more attention than I initially believed. I have very much enjoyed working with great colleagues on the Board and wish the company well in its future growth,” Hansen said in a statement.

“A prominent figure in the European business world with impressive experience gained outside of our sector, Jean-Pierre Hansen brought a very thoughtful and highly valued contribution to the board and he will be greatly missed,” said Mats Jansson, Delhaize Group chairman.

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Delhaize IT Cuts Split Between N.C., Maine

SALISBURY, N.C. — As part of an agreement to outsource some technology functions, 58 Delhaize employees — half here and half in Scarborough, Maine, will leave the company to work for IBM, a spokeswoman for Delhaize told SN.

According to an internal memo distributed last week, Delhaize is outsourcing its data center operations to IBM, beginning over the next several weeks, and is also planning to outsource its network services, help desk and desktop support functions by year-end. It said it had not yet finalized those latter plans. About 80 workers in total will be affected.


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“We believe outsourcing these functions to trusted partners will enable us to utilize the technology industry’s best providers of these services and further deliver innovation for our customers and associates,” Delhaize told SN in a statement. “While these decisions are never easy, we have taken great care to ensure that all associates affected by this decision are treated with respect throughout the entire transition process.”

Delhaize said all employees who are affected will be offered employment with the outside technology firm for six months, and will have an opportunity to apply for permanent positions at the new organization, or receive severance.

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Delhaize CFO Said to Mull Exit

BRUSSELS — The chief financial officer of Delhaize Group here may soon move to the same role at the French environmental services company Veolia, according to published reports.


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The report French newspaper Les Echos last week said Bouchut was the leading candidate for the vacant CFO role at Veolia. If he leaves Delhaize, Bouchut would be the third top executive to depart the retailer since Frans Muller was announced as its new chief executive in early September. U.S. CEO Roland Smith and more recently Europe CEO Stéfan Descheemaeker have announced resignations.

A financial analyst following Delhaize at the time of Muller’s appointment in September told SN that he would not be surprised if Bouchut also departed.

Read more: Delhaize Europe CEO Resigns

Bouchut joined Delhaize in 2012 from Carrefour and has served as the Group’s CFO, executive vice president and a member of its executive committee.

A Delhaize spokesperson was not immediately available for comment.

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Delhaize Europe CEO Resigns; U.S. CEO Search On

BRUSSELS — Delhaize Group said Monday that Stéfan Descheemaeker will resign from his role as chief executive officer of Delhaize Europe effective Oct. 31. The company did not provide a reason for his resignation.

Descheemaeker’s departure follows that of Delhaize’s U.S. CEO, Roland Smith, who resigned upon the appointment of Frans Muller as group CEO last month. The company acknowledged Smith resigned amid disappointment at not ascending to group CEO.


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Muller in a statement Monday said the company was searching for a successor for Smith — something the company did not acknowledge upon Smith’s departure Sept. 4.

As a result of Descheemaeker’s resignation, Delhaize said Kostas Macheras, executive vice president and CEO of Delhaize’s Southeast Europe and Asia divisions, and Dirk Van den Berghe, CEO of Delhaize Belgium, will report directly to Muller effective Nov. 1.

“I look forward to working directly with both Kostas and Dirk to continue building on the positive momentum of our European businesses to generate further progress,” Muller said in a statement. “Equally I look forward to partnering with our Group CFO, Pierre Bouchut, so that we can continue improving the focus and performance of the overall group. This will be amongst my key priorities in addition to working directly with the Delhaize America team while I evaluate and search for the best candidate to fill the Delhaize America CEO role.”

Read more: Delhaize Taps Muller; U.S. CEO Out

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Food Lion Sales Pace Delhaize Q2 Gains

BRUSSELS — Improved sales at repositioned Food Lion stores helped Delhaize Group post increases in sales and earnings in the second quarter, the retailer here said Thursday.

In the U.S., sales improved by 0.4% to $ 4.25 billion, and comparable-store sales improved by 1.1%. Sales figures do not include results of Sweetbay, Harveys and Reid’s stores, given their planned divesture. Sales improved as a result of higher volumes at Food Lion and Hannaford, driven by price investments at both banners.


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Underlying margins improved from 3.7% in last year’s second quarter to 3.8%, and underlying profits in the U.S. were up by 4.9% to $ 162 million.

The results prompted Delhaize to raise its underlying profit guidance slightly to at least 780 million Euros (around $ 1 billion).

Margins improved as a result of improved sales leverage and buying, reduced shrink, and lower expenses, the company said. The company also reduced its losses from its Bottom Dollar discount chain.

Read more: Beckers’ Delhaize a Work in Progress

Food Lion intends to complete its repositioning initiative during the fourth quarter, Pierre-Olivier Beckers, Delhaize’s chief executive officer, said. That initiative — consisting of price and service investments at around 875 stores, or 80% of the Food Lion fleet — has resulted in three straight quarters of improved revenues, officials said.

Beckers said the company was now looking at the “next step” in Food Lion’s evolution, which he described as “further accentuating the differentiation versus our competition, making Food Lion a true convenient neighborhood supermarket.”

Delhaize intends to open 10 Bottom Dollar discount stores in the second half of the year, officials said. That chain is making “significant progress” on cost and productivity initiatives and is continuing to gain new shoppers, but the division is still not profitable.

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Delhaize Group to Sell Montenegro Stores

BRUSSELS — Delhaize Group here said it has reached an agreement to sell 25 Maxi, Mini Maxi, and Tempo stores in Montenegro to Expo Commerce. Fincancial terms were not disclosed.


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Expo is a distributor of major branded fast-moving consumer goods. Delhaize and Expo will enter into a franchise agreement maintaining the Maxi, Mini Maxi and Tempo names. In 2012, these stores generated revenues of around $ 62.5 million (U.S.).

Delhaize said the transaction is expected to close in the fourth quarter of 2013 and is subject to regulatory approval and customary closing conditions.

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