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Delhaize Stock Jumps on Growth Forecast

Stock in Delhaize Group closed up nearly 13% yesterday after the retailer reported operating profits that exceeded earlier projections and a confident forecast for growth in 2009.

BRUSSELS — Stock in Delhaize Group closed up nearly 13% yesterday after the retailer here reported operating profits that exceeded earlier projections and a confident forecast for growth in 2009.

The retailer cited growth of private-label items, pricing investments and store renovations at U.S. banners Food Lion, Hannaford Bros. and Sweetbay as a key to results. Those chains rang up combined sales of $5.1 billion in the fourth quarter and $19.2 billion for the year, which both ended Dec. 31. Excluding an extra week in the quarter and year, they represent increases of 3.9% and 3.8%, respectively.

“The sales-building initiatives we started in the previous years continued to bear fruit in 2008,” said Pierre-Olivier Beckers, Delhaize’s chief executive officer, in a conference call discussing results. “Special attention was paid to strengthening our price positions and developing a compelling product offering,” including the Sweet Price and Sweet Deals promotional tools at Sweetbay introduced during the summer and stepped-up price promotions at Food Lion in the fall, he added.

Companywide, Delhaize reported annual net income of $620.4 million, up 21.2%. Delhaize expects operating profit for the year to grow between 3.5% and 6.5% during 2009, in part through plans to reduce companywide spending by around $127.8 million.

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