Delhaize Betting on Bottom Dollar

JON SPRINGER

SALISBURY, N.C. — Delhaize’s new corporate structure, which takes effect next week, clears the way for the retailer to expand behind its discount Bottom Dollar discount division and formally integrates shared functions for its banners from Maine to Florida.

The changes will help Delhaize trim down for an ambitious bout with Wal-Mart Stores on pricing, with Bottom Dollar as a potential major contributor to that effort.

A limited-assortment discounter noted for whimsical in-store flourishes, Bottom Dollar is succeeding Food Lion as the price leader among Delhaize banners — and it joins a growing number of limited-assortment discounters including Aldi, Save-a-Lot (Supervalu) and PriceRite (Wakefern Food Corp.) as new growth vehicles for the supermarket industry.

“The whole price-leader game has changed,” said one observer, noting the proliferation of private-label-focused, limited-assortment food retailers that can rival or beat Wal-Mart on price.

Delhaize officials late last year said that the company would look to double the number of Bottom Dollar stores it opened in 2010 as part of 50 to 55 new store openings planned. Bottom Dollar currently operates 28 stores in Maryland, Virginia and North Carolina. Some observers had speculated that Delhaize could look to convert acquired stores to the Bottom Dollar banner. A deal to buy rival Bi-Lo was recently scuttled by the latter’s maneuvers in bankruptcy court, but the deal could be revived.

Delhaize officials last week declined to provide SN with a precise number of Bottom Dollar store openings planned for this year, or their potential locations. But it’s worth noting that under the new corporate structure at Delhaize, Bottom Dollar is recognized as a banner distinct from the Food Lion family, which includes all Food Lion stores, Bloom, Harveys and Reid’s. Bottom Dollar since its founding in 2005 was considered a Food Lion division.

Meg Ham, a Food Lion veteran who previously served as Food Lion’s senior vice president of dry merchandising, was named president of the Bottom Dollar banner. She will report to Ron Hodge, who will assume the role of chief executive officer of Delhaize America Operations when the changes become effective next week.

As previously reported in SN, Hodge will also oversee banner presidents Cathy Green (Food Lion family), Beth Newlands Campbell (Hannaford Bros.) and Mike Vail (Sweetbay). Hodge will also oversee the strategy and research and supply chain functions, to be headed by Greg Amoroso and Mark Doiron, respectively.

Rick Anicetti, CEO of Food Lion, will shift to CEO of Delhaize America Shared Services and will have responsibility for the company’s corporate shared services functions. The corporate shared services leaders include Robert Canipe (corporate development), Linn Evans (legal affairs and government relations), Scott Harrison (information technology), Carol Herndon (finance and accounting), Denise Hoill (corporate communications and public relations), Bob Stapleton (organizational change management) and Brad Wise (human resources).

The combining of corporate support functions is expected to be a major contributor to a cost-savings plan that will help fund the pricing effort. Company officials late last year said the company was looking to reduce its expenses by around $450 million over the coming three years. Combining certain functions including supply chain and sharing of common private-label brands have been in the works for some time at Delhaize.

Delhaize said it would close 15 Food Lion stores and one Bloom location as part of the restructuring effort. The stores, described by Delhaize as money-losers, are set to close on or before Feb. 15 and include a Bloom location in Ashland, Va., and four Food Lion stores in Tennessee, three in Virginia, two in South Carolina and single stores in Maryland, Kentucky, Florida and Georgia.

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