FOOD LION TO PILOT NEW CONCEPT

DAVID ORGEL

NEW YORK -- Food Lion is gearing for a 2004 test of a new retail concept aimed at bolstering share in its core markets, according to a speech here by Robert Canipe, vice president of business strategy for the Salisbury, N.C.-based retailer.

The concept will be created from remodels at four or five existing Food Lion locations and will result from extensive research both in the U.S. and abroad, he said without divulging specifics.

"A new concept is an opportunity because we are saturated in our core markets," he said. "This is more of a portfolio approach to enable us to get even more growth from core markets because we'll have a distinct offer vs. what we currently offer with Food Lion."

He spoke at the CIES Management Development Program (MDP) Annual Congress, an event whose attendees are young managers from food retail and supplier companies around the world.

Food Lion, which operates about 1,200 units, is part of Delhaize America, the U.S. division of Brussels, Belgium-based Delhaize Group.

Food Lion's "concept renewal" pilot comes on the heels of the chain's "market renewal" program in its Raleigh, N.C., market, in which the company remodeled 68 of 69 units and bolstered regional training and advertising.

But Canipe stressed that Food Lion's chainwide needs go beyond the approach in Raleigh.

"Raleigh is not the future; we must continue to challenge and see where to go in the future," he said. "Renewal needs to happen everywhere. We'll even have to go back to Raleigh in a few years too."

Canipe said the need for concept renewal stems from extensive retail competition, company sales improvement goals, and new convenience expectations of consumers. Food Lion's concept renewal research was conducted by a fully dedicated cross-functional team with the help of a consulting company, he said. Steering and advisory committees were also formed for the project.

Executives researching concept ideas "visited stores in Europe and the U.S. and took learnings," he said. "We developed a large number of initial concepts and then refined them, narrowing them down to two or three. We decided to place our focus on one concept and keep the others on the back burner." He said the company hopes the test will result in a rollout of additional units.

Although Canipe didn't describe elements of the new concept, he noted that consumers are looking for stores that cater to convenience by bundling together products and services in one location, including fuel services.