What is in this article?:
- Delhaize Closing 33 Sweetbays
- Closures Expected to Boost Profits
"What we are announcing today is a first step to stop the bleeding at loss-making operation, and definitely over time a more structural solution for the rest of Sweetbay would be a logical step."
— Pierre Bouchut, CFO, Delhaize Group
Closures Expected to Boost Profits
Delhaize said it would take a charge of around $520 million (U.S.) to earnings, most in the fourth quarter, to cover store closure costs as well as impairment charges at its Maxi banner in Europe. The elimination of the money-losing stores is expected to provide a $40 million benefit to underlying profits annually, officials said.
Food Lion stores set to close in mid-February include four in Virginia, two in South Carolina and one in North Carolina. The three Bottom Dollar closures are in the Philadelphia market.
Although the company said it would release sales figures and financial results for the quarter and fiscal year in March, it said underlying profits for the year would be down by 17.5% — about what was expected. Fourth-quarter sales improved by 0.3%, helped in part by improving results at 700 Food Lion stores that have completed price and service investments under its ongoing rebranding program.
Transactions (up by 3.5%) and items per trip (1% growth) at rebranded Food Lion stores improved sequentially from the third quarter and are outperforming the 424 stores yet to have received such changes by 5.7%. Bouchut said sales were especially good in two test markets where Food Lion stores have lowered dairy and frozen prices most aggressively. Those categories combine for around 20% of Food Lion’s overall sales.
T.R. Robinson, senior vice president for merchandising, and James Egan, senior vice president for retail operations, were among those who lost their jobs in the recent restructuring.
The following vice presidents also left the company immediately: Kyle Price, produce merchandising; Pete Bonneau, center store merchandising; Mike Brooks, strategy; Jim Corby, produce merchandising; Steve Culver, government relations; Kristen Hanson, our brands; Mike Harris, risk management; Lisa Miller, sustainability; and Lisa Toner, legal affairs.
In addition, four vice presidents will depart in March: Shawn Beichler, real estate; Steve Campbell, organization development; Bonnie Moore, associate relations; and Eric Watson, diversity and inclusion.
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