Delhaize Group CEO to step down as Food Lion overhaul boosts profit
By Emily Ford
SALISBURY — Delhaize Group, the Belgian grocer and parent company of Food Lion, today reported a profit and announced CEO Pierre-Olivier Beckers plans to retire by the end of the year.
Both Food Lion and Delhaize America are headquartered in Salisbury.
Delhaize Group reported revenue growth of 2.1 percent for the first quarter, comparable store sales growth of 1.9 percent in the U.S. and 2.4 percent in Belgium and underlying operating margin of 3.9 percent.
The group’s increase in operating profit was the first in six quarters, raising hopes that cost-cutting measures and an overhaul of Food Lion stores are starting to pay off.
The profit was particularly helped by revenue growth at Delhaize America and Delhaize Belgium.
Phase four of the Food Lion rebranding effort will begin next week, bringing total revamped stores to 78 percent of the grocery chain.
In response to increasing competition and a shrinking market share, Delhaize in 2011 began overhauling the Food Lion chain, cutting prices, improving fresh produce and rolling out more private labels for price-conscious shoppers.
Beckers said today Delhaize Group will continue to make “significant investments in our strategic initiatives” for the remainder of 2013.
“We had a strong first quarter driven by positive revenue growth and profitability at Delhaize America and Delhaize Belgium, partly supported by favorable weather conditions,” Beckers said in a statement. “Food Lion repositioned stores continue to perform well, and in Belgium consumer patterns proved to be more robust than expected.”
Delhaize America laid off about 350 corporate employees earlier this year as part of a continuing reorganization that started in December with the ouster of Cathy Green Burns as Food Lion president.
Delhaize does not report earnings by chain but announced in January that Food Lion had recorded its best quarterly performance since 2006 during the fourth quarter of 2012.
Food Lion has been battling for market share in North Carolina, competing against Walmart, Harris Teeter, Aldi and others. Florida-based Publix also is moving into the Carolinas.
In 2012, Food Lion closed 113 underperforming stores and pulled out of Florida. Delhaize America also shut down the Bloom brand.
As part of Delhaize’s succession plan, Beckers will stay in his post until a new CEO is appointed. He will continue to serve on the board after stepping down as CEO.
Beckers joined Delhaize Group in 1983. He has been a director of the company since 1995 and was appointed president and CEO in January 1999.
Under his leadership, Delhaize transformed itself from a Belgian company with an international presence to an integrated group. Since 1999, the number of stores has grown from 1,904 to 3,411 in 10 countries on three continents.
Delhaize Group has increased its growth profile with 30.7 percent of the stores now located in growth markets generating 14 percent of the group’s revenues, compared to less than 5 percent when Beckers took office.
Contact reporter Emily Ford at 704-797-4264.