BRUSSELS — Delhaize Group posted improved volumes at Food Lion and Hannaford in the third quarter, but price investments at both chains resulted in lower profits.
Additional price investments in international markets triggered an overall net loss of around $112 million (U.S.) for the quarter — a figure below analyst estimates. Worldwide revenues of $7.1 billion (U.S.) were flat with the same period a year ago.
In the U.S., sales of $4.4 billion improved by 2.2%, and same-store sales increased by 2.2% — 2.6% excluding 11 stores closed earlier this year. Officials said U.S. inflation was 0.5% during the quarter.
Underlying profit in the U.S. declined by 20.2% to $169 million, and operating margins were down by a full percentage point to 3.9% of sales. The decrease is a result of released bonus accrual in the third quarter last year and lower gross margins at Hannaford and Food Lion as a result of price investments.
Read more: Delhaize Europe CEO Resigns; U.S. CEO Search On
The results do not include the Sweetbay, Harveys and Reid’s banners, which are in the process of being acquired by Bi-Lo Holdings. Delhaize said Thursday that the deal is likely to close in the first quarter of 2014, rather than the fourth quarter of 2013 as expected previously.
Pierre-Olivier Beckers, Delhaize’s outgoing chief executive officer, said the brand repositioning that led to improved performance at Food Lion stores will begin its fifth and final phase next week at stores along the North Carolina and South Carolina coasts. In the meantime, the company will embark on implementing a unique selling proposition around “easy, fresh and affordable” at rebranded stores.
| Suggested Categories | More from Supermarketnews |
 |
|
|
|
