BRUSSELS — Delhaize Group here said last week it plans to shutter 113 Food Lion stores and eliminate the Bloom banner as part of a broader reorganization that will eliminate about 5,000 jobs.
The company said it would convert 42 of its Bloom stores to Food Lion and shutter the remaining seven locations. The closings follow a separate round of 15 Bloom conversions and one closing in the Carolinas last March.
“It was a good concept,” said Neil Stern, senior partner, McMillan Doolittle, Chicago. “In the last three or four years, they had done a nice job finding a voice for Bloom as being very customer-friendly, easy to use and easy to shop. The macro problem with Bloom is, how do you support from an expense standpoint a new banner that doesn’t really have any meaningful market share anywhere? It became a very expensive proposition to keep the thing going.”
Delhaize debuted Bloom in 2004 with an emphasis on convenience, prepared foods, and technology such as handheld scanners and electronic kiosks.
Delhaize also said it will convert 22 of its price-impact Bottom Dollar Food locations in North Carolina, Virginia and Maryland, and shutter the six remaining Bottom Dollar Food stores in those markets.
Stern noted that some of those early Bottom Dollar stores might not have been as thoroughly thought out as the ones it has been opening recently in the Philadelphia market, where Delhaize said it is seeing volume gains.
“We have decided to focus our Bottom Dollar Food brand on markets which provide the greatest opportunity for growth such as Philadelphia, where we have enjoyed considerable success, and Pittsburgh, where we will open our first stores in the first quarter of 2012,” the company said.
Delhaize will also close a distribution center in the U.S. and 20 stores in Southeastern Europe. The moves will reduce U.S. revenues by about $650 million, the company said.
The Food Lion closings include 25 stores in Florida, which reports said encompassed all of the banner’s locations in that state. Food Lion could not be reached for clarification.
Other locations were scattered throughout the Southeast and Mid-Atlantic.
In total the company is closing 164 locations in the U.S. and Europe and converting 64 Bloom and Bottom Dollar Food stores to Food Lion.
Pierre-Olivier Beckers, president and chief executive officer, Delhaize Group, in a prepared statement, said, “This decision is in line with our ‘New Game Plan,’ which is aimed at accelerating profitable growth.”
The company also reported that sales in the U.S. were up 1% in the fourth quarter, to $4.77 billion, and up 2.2% for the fiscal year, to $19.23 billion. Comps in the U.S. were down 0.4% for the fourth quarter.