• 39°

Food Lion reports sales up Delhaize earnings, stock rise; more store closings on way

SALISBURY — The makeover of 703 Food Lion stores, including those in Rowan County, appears to be paying off for parent company Delhaize.
Salisbury-based Food Lion recorded its best quarterly performance since 2006 during the fourth quarter of 2012, Delhaize announced Thursday.
Along with the positive earnings report, Delhaize said it will close eight underperforming Food Lion stores, as well as stores in other Delhaize America chains, to “strengthen the organization’s store portfolio.”
Delhaize stock rose nearly 10 percent on the news, closing at $46.69 per share Thursday.
• Food Lion will close one store in Belmont, four in Virginia and three in South Carolina. After the closings, Food Lion will have 1,119 locations and will continue to operate in 10 states.
• Sweetbay, based in Florida, will close 33 stores and a pharmacy in Florida.
• Bottom Dollar Food, based in Salisbury, will close three stores in the Philadelphia area.
Delhaize, a leading supermarket chain in Belgium that makes about 65 percent of its sales in the United States, last year closed 113 Food Lion stores and pulled out of Florida.
Delhaize on Thursday reported sales were up 2.3 percent or $7.66 billion in the fourth quarter of 2012. That includes a 1.9 percent uptick in the U.S., where Food Lion makes up the lion’s share of Delhaize America, also based in Salisbury.
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.
Delhaize will continue to revamp Food Lion stores in the first quarter of 2013.
Transactions at revamped Food Lion locations increased by 3.5 percent in the fourth quarter of 2012, and the number of items in each grocery cart increased by 1 percent.
Thursday’s earnings report marked a turning point for Delhaize, which had posted four quarters of decline. Price cuts at Hannaford, plus new Bottom Dollar Food stores — sister chains to Food Lion — helped boost sales volume.
“We are pleased to announce that organic revenue growth improved during the fourth quarter, in particular as a result of positive volume growth at Delhaize America,” Pierre-Olivier Beckers, president and CEO of Delhaize Group said in a statement. “Food Lion reported positive volume, transaction and comparable store sales growth for the quarter and recorded its best quarterly performance since 2006.”
The earnings report comes on the heels of a management shake up at Food Lion and Delhaize America.
New Delhaize America CEO Roland Smith recently removed Cathy Green Burns as president of Food Lion, as well as two senior vice presidents based in Salisbury. Fifteen Food Lion and Delhaize America officers lost their jobs last week, including nine based in Salisbury, a 25 percent decrease in top management positions.
Delhaize’s underlying operating profit for 2012 was down 17.5 percent from 2011. The company had expected the decrease.
“We remain determined to accelerate the transformation of our business,” Beckers said. “In 2013, our focus will be on further strengthening our store brands, accelerating revenue growth, maintaining strict cost control and generating free cash flow.”
Delhaize said it will incur about $518 million in one-time charges, including $172 million for the Sweetbay store closings and $20 million for U.S. management layoff costs.
Contact reporter Emily Ford at 704-797-4264.

Comments

Comments closed.

Local

City approves DOT agreement, Salisbury Station project could begin next year

Local

County plans to use vulture effigy, enforce violations to remedy animal carcass feeding problem

Education

Two weeks after ending enhanced protocols, Catawba has no COVID-19 cases

News

Council to hear revised version of Downtown Main Street Plan

News

Political Notebook: Majority of likely voters, local legislators support school reopening bill

Coronavirus

COVID-19 vaccinations in Rowan top positives since start of pandemic

Crime

Man faces drug charges after breaking and entering call

Lifestyle

Waterworks schedules 2021 Summer ARTventures

Crime

Blotter: Man faces drug charges after being found passed out in vehicle

Ask Us

Ask Us: What programs exist for litter cleanup?

Business

County begins accepting restaurant grant applications

Crime

Blotter: Salisbury man charged with nine more felony sex offenses

Nation/World

Biden team readies wider economic package after virus relief

Nation/World

Spacewalking astronauts prep station for new solar wings

Nation/World

Cuomo sorry for remarks aide ‘misinterpreted’ as harassment

Nation/World

Trump calls for GOP unity, repeats lies about election loss

Education

Rowan County administers 700 vaccines, with majority going to local educators

Crime

Shoplifting at Walmart presents challenge for Salisbury police

Local

Commissioners will hear details about changes to solar energy policies

Business

After overcoming obstacles, local barber Daniel King earns registered status

Lifestyle

39th annual K12 student exhibitions go virtual

Business

Biz Roundup: Chamber of Commerce to host ‘Salute to Agri-Business’ at March Power in Partnership

Local

Local legislators back bills ranging from new restrictions on sex offenders to Holocaust education

News

After surviving COVID-19 scare, Lois Willard set to celebrate 100th birthday