NEW YORK — Delhaize Group is hoping to streamline some of its delivery logistics through coordinated systems and processes that are rolling out across its banners next month, company executives said at an investor conference here last week.
The Brussels-based parent of Food Lion, Hannaford Bros., Sweetbay and Bottom Dollar is counting on savings from combined procurement as well as more efficient store-delivery processes to help reach the $300 million in cost savings it has targeted in light the sluggish economy and competitive pressures.
The company for the last several years has been working to consolidate its supply chain, and by early October it expects to have completed the rollout of systems and processes that will “allow us to utilize the whole network,” Mark Doiron, chief supply chain officer, said at the Goldman Sachs Retailing Conference here last week.
In the past, he said Delhaize “actually had product kind of going by each other's businesses, not leveraging a full truckload.” With the coordinated systems, the company anticipates more full truckloads and a “quantifiable” reduction in the cost of goods, he said.
The company also is in the process of consolidating procurement and category management “to have one point of contact, so we can fully leverage the size of our business up and down the East Coast.”
“That's already giving us benefits on the private-brand negotiations that we have in our business, and will also help support better cost with regard to national-brand companies as well,” he said. “There are a lot of different initiatives that are happening that are going to allow us to negotiate differently with our suppliers. Taking some of the commodity risks out of our suppliers that are providing products to us is going to be one of the benefits that we're going to be able to have.”
Asked about acquisition opportunities, particularly as Montvale, N.J.-based A&P has sought to shed some locations, Ron Hodge, chief executive officer of U.S. operations for Delhaize, seemed to downplay the possibility.
“I would say the focus that we have here in the U.S. is improving our price competitiveness in our existing stores, our Food Lion brand, and in expanding our Bottom Dollar Food format and brand in regions where we don't currently offer any,” he said. “So we don't rule anything out, but I would re-emphasize that our focus is on improving the metrics in the businesses that we have.”
He also said the company was preparing a rapid ramp-up of the Bottom Dollar banner in the Philadelphia market, beginning in the next few months.