TAMPA, Fla. — Delhaize Group said Thursday that it would close 33 Sweetbay stores here by next month, or about one-third of the chain.
“While these decisions are difficult, especially given the impact on our associates, customers and communities, these actions will continue to enhance the performance of our overall store portfolio and further enable us to deliver profitable growth and accelerate shareholder value,” the company said in a statement. The company also said Thursday it would close eight Food Lion stores, and three Bottom Dollar Food stores.
Sweetbay will operate 72 stores after the closures, which are expected to be complete in mid-February. In addition to the store closures, Sweetbay will also discontinue its pharmacy operation at its Bonita Springs, Fla., store.
The closures are expected to displace approximately 2,000 employees.
In a conference call discussing fourth-quarter revenue results Thursday, Pierre Bouchut, Delhaize Group’s chief financial officer, said the closures would eliminate those stores operating at a loss in the Sweetbay banner, but said it was the “first step” toward additional changes at Sweetbay. The elimination of the money-losing stores is expected to provide a $40 million benefit to underlying profits annually, officials said.
“We decided to close the loss-making stores, and we believe that this is a sensible decision,” Bouchut said. “Regarding the strategy on the remaining stores and how it fits within Delhaize, we thought strategically about this. And what we are announcing today is a first step to stop the bleeding at loss-making operation, and definitely over time a more structural solution for the rest of Sweetbay would be a logical step.
Read more: 15 Executives Out in Further Delhaize Shakeup
“But Sweetbay is already cash positive, excluding the losses of those loss-making stores, and all things being equal, Sweetbay would be profitable in 2013,” he added. “But naturally, as you know, it needs to close a significant gap to get to the level of the other operations of in America.”
Delhaize said it would take a charge of around $520 million (U.S.) to earnings, most in the fourth quarter, to cover store closure costs as well as impairment charges at its Maxi banner in Europe.
Although the company said it would release sales figures and financial results for the quarter and fiscal year in March, it said underlying profits for the year would be down by 17.5%. Fourth-quarter sales improved by 0.3%, helped in part by improving results at 700 Food Lion stores to have completed price and service investments under its rebranding program.
Transactions (up by 3.5%) and items per trip (1% growth) at rebranded Food Lion stores improved sequentially from the third quarter and are outperforming the 424 stores yet to have received rebranding initiatives by 5.7%.
Borchut said sales were especially good in two test markets where Food Lion stores have lowered dairy and frozen prices most aggressively. Those categories combine for around 20% of Food Lion’s overall sales.
Sidebar: Delhaize's New Leadership Structure
SALISBURY, N.C. — Delhaize America’s new corporate structure — which eliminated 25% of the leadership positions at the retailer — went into effect last week.
The new executive structure, which creates some new roles and eliminates others, is as follows, according to a memo from Roland Smith, the chain’s chief executive.
- Strategy and Development, reporting to Davis Criscone, chief strategy and development officer: vice presidents David Hilse, strategy; and Kyle Mitchell, store development.
- Finance, reporting to Greg Amoroso, chief financial officer: vice presidents Tom Kelly, controller; and Lionel Desclee, finance.
- Supply chain, reporting to Mike Vail, chief supply chain officer: Tod Pepin, senior vice president, center store merchandising; Tim Jacques, VP, center store merchandising; Geoff Waldeau, SVP, fresh merchandising; Mark Messier, VP, fresh merchandising; Chris Lewis, VP, supply chain services; Gerry Greenleaf, VP, transportation and distribution; Attila Akat, SVP, our brands; and Mike Cantrell, VP, pharmacy.
- Food Lion, Harvey’s and Reids, reporting to Beth Newlands Campbell, president of Food Lion: JJ Fleeman, VP, strategy and business development; and Karen Fernald, SVP, merchandising.
- Hannaford and Sweetbay, reporting to Brad Wise, president of Hannaford: Rick Meyerkopf, VP, merchandising; Mary Wright, VP, marketing; and Brad Schools, SVPO, retail operations.
- Bottom Dollar Food, reporting to Meg Ham, president of Bottom Dollar: Gene Faller, VP, retail operations; Jason Wilson, strategy and business development; and Hans Lefebvre, VP, merchandising.
- Information technogogy/info security, reporting to Deb Dixon, chief information officer: Odile Ducatez, VP, global IT business; Nathalie Haddad, VP, solutions delivery; Eric Norden, VP, global IT infrastructure; and John Kirkwood, VP, chief information security officer.
The company is searching for a new chief people officer, Smith said.
T.R. Robinson, senior vice president for merchandising, and James Egan, senior vice president for retail operations, were among those who lost their jobs. The following vice presidents also left the company immediately: Kyle Price, produce merchandising; Pete Bonneau, center store merchandising; Mike Brooks, strategy; Jim Corby, produce merchandising; Steve Culver, government relations; Kristen Hanson, our brands; Mike Harris, risk management; Lisa Miller, sustainability; Lisa Toner, legal affairs. In addition, four vice presidents will depart in March: Shawn Beichler, real estate; Steve Capbell, organization development; Bonnie Moore, associate relations; and Eric Watson, diversity and inclusion.
Map: Delhaize Store Closures
SALISBURY, N.C. — Delhaize America here on Thursday announced it was closing 45 underperforming stores, including 33 Sweetbay stores, eight Food Lion stores, three Bottom Dollar Food stores and one Sweetbay pharmacy.
“While these decisions are difficult, especially given the impact on our associates, customers and communities, our actions will continue to enhance the performance of our overall store portfolio, deliver profitable growth and accelerate shareholder value,” the company said in a statement.
The stores are expected to close by mid-February. A full list of stores is available below the map.
Click each pin for store name and address. Click here to view a bigger map.
Bottom Dollar Food
20 Shelbourne Rd., Reading, Pa.
782 Bethlehem Pike, North Wales. Pa.
219 West Butler Ave., Chalfont, Pa.
Food Lion
602 Park St,, Belmont, N.C.
65 Sycamore Ave., Charleston, S.C.
1207 W. Wade Hampton Blvd., Greer, S.C.
320 North Duncan Bypass, Union, S.C.
679 Lake Center C-1, Moneta, Va.
1208 Perrowville Rd., Forest, Va.
13065 Fair Lakes Shopping Center, Fairfax, Va.
10159 Hastings Dr., Manassas, Va.
Sweetbay
10175 Taimiami Trail, Punta Gorda, Fla.
2410 Immokalee Rd., Naples, Fla.
5926 Premier Way, Naples, Fla.
4015 Santa Barbara Blvd., Naples, Fla.
1700 E State Rd 50, Clermont, Fla.
1714 Us Hwy 27, Clermont, Fla.
501 N. Beneva Rd., Sarasota, Fla.
9017 S.R. 52, Hudson, Fla..
4665 66th St. N., Kenneth City, Fla.
2333 W. Hillsborough, Tampa, Fla.
5201 33rd St. E., Bradenton, Fla.
11160 Spring Hill Dr., Spring Hill, Fla.
5050 10th Ave. East, Tampa, Fla.
7325 Gall Blvd., Zephyrhills, Fla.
507 Wheeler St., Plant City, Fla.
6095 9th Ave. N., St. Petersburg, Fla.
955 62nd Ave S., St. Petersburg, Fla..
4500 S. Suncoast Blvd., Homosassa, Fla.
4519 Gunn Hwy., Tampa, Fla.
1861 N. Highland, Clearwater, Fla.
5320 Ehrlich Rd., Tampa, Fla.
7431 S.R. 54, New Port Richey, Fla.
6220 N. Hwy. 98, Lakeland, Fla.
17605 Bruce B Downs, Tampa, Fla.
1681 Main St., Dunedin, Fla.
1943 US Alt. 19 N., Tarpon Springs, Fla.
3410 US Highway 301 N., Ellenton, Fla.
10617 Sheldon Rd., Tampa, Fla.
8833 Mitchell Blvd., Trinity, Fla.
8750 SR 70, Bradenton, Fla.
1794 22nd St. S., St. Petersburg, Fla.
7580 49th N., Pinellas Park, Fla.
3400 East Lake Road, Palm Harbor, Fla.
Sweetbay (pharmacy only)
8951 Bonita Beach Rd., Bonita Springs, Fla.
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