BRUSSELS — While Delhaize is pleased with results at rebranded Food Lion stores, the company said Wednesday it is increasing price investments and promotional activity at its Hannaford banner, saying that new competition, a tight economy and slow-growing markets has led to declining sales at the New England-based chain.
At Food Lion, price investments and other new service initiatives at rebranded stores helped Delhaize’s largest U.S. chain post flat comparable store revenues when adjusted for inflation during the third quarter.
Overall U.S. sales declined 2.4% to $4.8 billion in the quarter, and comparable-store sales were down 1.6%, officials said. Mainly as a result of price investments, U.S. profit margins sunk by 50 basis points to 4.6% of sales, and U.S. operating profits tumbled 12.3% to $219 million in the quarter, Delhaize said.
Read more: Food Lion Revamps Hit Profits
The additional investments in price at Hannaford led officials to “significantly reduce” bonus accruals for U.S. officials, noting that the company was unlikely to meet profitability targets for the fiscal year.
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