DELHAIZE NAMES NEW PRESIDENT FOR FOOD LION

DAVID GHITELMAN / Additional reporting: ELLIOT ZWIEBACH

SALISBURY, N.C. -- Delhaize America here appears to be moving quickly to integrate its operations with those of Hannaford Bros., the Scarborough, Maine-based supermarket chain Delhaize completed acquiring earlier this month.

In what several observers told SN was one of the first major steps in that integration, Delhaize said last week that Joseph Hall, 50, president and chief operating officer of Delhaize's Food Lion subsidiary, had decided to take early retirement. Delhaize and Hall both said that Hall, a 25-year Food Lion veteran, would consult for the company.

Hall was named president in early September 1999, when Delhaize Belgium created Delhaize America as a supermarket holding company to manage both Food Lion and Hannaford, whose acquisition had been anounced a month before. Hall had been Food Lion chief operating officer since 1995.

Bill McCanless, chief executive officer of both Delhaize America and Food Lion, will succeed Hall as Food Lion president, while Rick Anicetti, who had been executive director of Hannaford's Southeastern division, has been named executive vice president and chief operating officer of Food Lion.

Hannaford's Southeastern division ceased to exist in late May, when Hannaford announced it would sell or close all 51 of its stores in the Southeast to win Federal Trade Commission approval of its deal with Delhaize.

According to Delhaize, Anicetti played an important role in building Hannaford's Southeast division into a $653 million-a-year business.

McCanless said he expected Anicetti "to draw upon the many best practices" from both Food Lion and Hannaford.

In another move last week that appears aimed to strengthen the ties between Delhaize and Hannaford, the company said Bruce Dawson, president of Kash n' Karry, a 140-store Tampa, Fla.-based Food Lion unit, will now report to Hugh Farrington, Delhaize vice chairman and Hannaford CEO.

Farrington observed that Kash n' Karry and Hannaford "share core elements of full service, community orientation and a strong perishables presentation."

Explaining why he opted for early retirement, Hall did not cite post-merger integration issues. He said, "This is a purely personal decision. I've reached a point in my career and in my life where I believe it's a good time to explore new and equally exciting challenges."

One of those challenges, he made clear, would be consulting for Food Lion. "I look forward, through my consulting agreement, to remain part of this organization for many years to come."

However, some observers told SN that Hall's departure from his long-time employer was probably not so smooth.

Jonathan Ziegler, San Francisco-based managing director of Deutsche Banc Alex. Brown, New York, said Hall was probably pushed out. "Hall probably got a godfather offer -- a retirement deal he couldn't refuse -- and took it," Ziegler said.

The reason Hall was pushed, Ziegler added, mostly likely had to do with Delhaize's perception of Hannaford's management strength. "There's a bench strength at Hannaford that Delhaize wants to use, and there wasn't room for both executives," Ziegler explained.

He said Hall is "a talented executive, but one from the old Food Lion school, which believes the Food Lion name stands for something. But the company prefers new-school thinking, which believes Delhaize America needs to build a multiregional operation with different formats, each of which is able to stand on its own."

According to Meredith Adler, securities analyst with Lehman Bros., New York, Delhaize America wants to bring some of Hannaford's strong operating principles to its other formats (Food Lion and Kash n' Karry). "A recent Consumer Reports study showed Hannaford ranked No. 4, while Food Lion was rated No. 33, which is indicative of the problems Food Lion faces and the realization it has to take advantage of the talent it has in Hannaford," she said.

"Hannaford is generating very good returns, and it runs awfully good stores, with good service and great prices, and Food Lion feels it should benefit from those kinds of returns and those kinds of stores as well."

One analyst who asked not to be quoted by name said, "As much as anything, there's a recognition at Food Lion that it's time to start to do something by bringing in an operations guy who's been successful at another chain. Joe Hall was the operating guy at Food Lion, and he's the one that had to go."

According to Gary Giblen, director of research and executive vice president of C L King Associates, New York, "Hannaford has perhaps the industry's most forward-thinking focus on professional development, including the hiring of several MBAs. So it's natural to think there would be people at Hannaford that would be well-equipped to work with a larger company and operate at an even more complex level of food retailing.

"Though you normally think that executives from acquired companies wouldn't survive, here it's different because Hannaford has a more developed pool of management.

"Rich Anicetti was an important executive at Hannaford. He was not that visible to outsiders, but clearly he was one of a select cadre of people they developed with a broad management background who was being groomed for bigger things."