Delhaize to Revise Food Lion Strategy

BRUSSELS — Delhaize officials on Thursday promised more price investments and a "revised strategy" for its Food Lion chain during 2011.

BRUSSELS — Delhaize [4] officials on Thursday promised more price investments and a "revised strategy" for its Food Lion chain during 2011.

The changes will seek to to capitalize on improving sales trends at Food Lion during the second half of 2010 and improve its competitive standing in particular markets, officials said in a conference call discussing fourth quarter and fiscal year financial results.

The changes — which include the new value private brand line My Essentials — would begin arriving at Food Lion stores in the second quarter. Officials said they would provide further details then. "We’re looking at our revised strategy for Food Lion and we believe that price is a very, very important element of this brand and we need to strengthen that price in those markets we are piloting," said Ron Hodge, CEO of Delhaize America, said.

Delhaize highlighted improved performance at its U.S. operation in the second half of the fiscal year as benefits from the initiatives of its "new game plan" announced a year ago began to arrive. U.S. operating profits improved by 28.6% in the fourth quarter to $296 million and by 1.5% when adjusted for an impairment charge in the same period a year ago. U.S. operating margin of 6.3% of revenues was its best quarterly result in 10 years, which the company attributed to cost savings.

As previously reported, Delhaize posted quarterly sales of $4.7 billion, a 0.1% increase, with comparable-store sales down by 0.8%. For the fiscal year, Delhaize posted $998 million in operating profits on $18.8 billion in sales. Sales were down by 1% for the year, and profits fell by 1.8%.

Also Thursday, Delhaize said that Bill McEwan, currently the CEO of Canadian grocer Sobeys; and Jean-Pierre Hansen, a member of the executive committee at French energy company GDF Suez, would stand for three-year terms as directors at the retailer’s annual meeting May 26.