BRUSSELS — Delhaize Group on Thursday posted increases in sales, margins and profits for the second quarter, but noted competition had heightened and reiterated a grim forecast for the second half of the year.
The company noted competition was especially rough in the Southeast, where aggressive price competition and slowing inflation pressured Delhaize’s Food Lion banner, according to Rick Anicetti, chief executive officer of Food Lion, speaking in a conference call.
“It is very promotional environment. I’m seeing some price points from a promotional standpoint that we’ve not seen in a dozen years,” Anicetti said.
At Food Lion, promotions including a recently launched “free milk” purchase program have been implemented with the goal of increasing basket size. Delhaize’s Hannaford banner in the Northeast and Sweetbay in Florida also continued with price investment programs during the quarter, officials said.
These efforts helped Delhaize’s U.S. banners to post sales of $4.8 billion in the quarter, which ended June 30, an increase of 3.4%, and comparable sales of 0.2% when adjusted for the Easter and July 4 holidays. Operating profits, sparked by lower expenses and improvements in shrink, increased 10.1% to $260 million. Including operations in Europe, Delhaize reported quarterly sales of $7.3 billion, an increase of 14.3% (3.6% at identical exchange rates) and operating profits of $182.5 million.
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