Delhaize to Close 7 Sweetbays

MARK HAMSTRA

TAMPA, Fla. — Sweetbay said it plans to close seven Florida stores in the next six to eight weeks, although the chain's Brussels-based parent company, Delhaize Group, noted that it was pleased overall with the banner's positive trends.

“While most Sweetbay stores have been performing consistently better since their banner conversion and the price investment program started mid-2007, a handful of Sweetbay stores remained significantly underperforming with too much of an uncertain future,” Delhaize said in a statement announcing fourth-quarter sales results.

Delhaize said it would take a pre-tax charge of about $23.8 million in the fourth quarter for the closures, plus an additional impairment charge of $21.4 million for 19 other Sweetbay locations. A year ago, Delhaize recorded a charge of $18.6 million for 25 underperforming Sweetbay locations.

The planned closures encompass three locations in the Tampa Bay area, two in Sarasota and one each in Fort Myers and Englewood, a spokeswoman for the chain told SN. Most of the stores in the chain are converted Kash n' Karry locations, although it was not clear if the closed sites were former Kash n' Karry stores or newly built Sweetbays.

Nicole LeBeau, the Sweetbay spokeswoman, said the stores slated for closure were evaluated as their leases came up for renewal and were not deemed viable for the long term.

Sweetbay currently operates 108 supermarkets, including the seven slated for closure. Meanwhile, the chain plans to open three new stores in 2009: one each in Tampa, Tarpon Springs and Clermont, Fla.

In a further sign of the weak economy in Florida, which has been one of the states hardest hit by the real estate slowdown, Albertsons LLC last week said it planned to close four locations in the state — in Orlando, Ocala, Tallahassee and West Palm Beach. The closings, scheduled for the end of February, would leave Albertsons with 36 locations in the state following its sale last year of 49 stores to Publix Super Markets, Jacksonville, Fla.

It continues to operate a distribution center in Plant City, Fla., and a regional headquarters office in Lake Mary, Fla.

A spokeswoman for Albertsons LLC, based in Boise, Idaho, said the company also plans to close two locations in its Southwest region and three in Texas, leaving it with 249 locations overall.

Despite the weak performance at some Sweetbay locations, Delhaize said Sweetbay led its sister chains Food Lion and Hannaford Bros. in 2008 same-store sales gains. U.S. comparable-store sales at all three divisions combined were up 2.9% in the fourth quarter and 2.5% for the year.

Overall sales in the U.S. rose 3.9% in the fourth quarter, excluding an extra week in 2008, compared with year-ago results. Including the extra week, sales were up 12.2%, to $5.15 billion.

“Transaction count was positive at Food Lion and Sweetbay and stable at Hannaford, and this marked a clear reversal of the negative trend in the previous two quarters,” Delhaize said.

The company said its private-label sales “continued to boom,” accounting for 19.2% of revenues at Food Lion. Price investments and marketwide remodeling efforts also helped drive gains, the company said.

For 2008, U.S. sales rose 3.8% excluding the extra week and 5.9% with the extra week, to $19.24 billion.

Food Lion plans marketwide renewals in Daytona, Fla., and Columbia, S.C., in 2009.

Delhaize is scheduled to release earnings on March 12.