FOOD LION WILL OPEN 75 NEW STORES

TRACY PRESSON

SALISBURY, N.C. -- Food Lion here said it will focus its energies on the Southeast and Mid-Atlantic states, with a strategy that incorporates both new store constructions and acquisitions.

The chain will spend $360 million this year to open 75 new stores -- its most since 1993 -- and remodel and/or expand 133 existing units, said President and Chief Executive Officer Tom Smith at the Food Lion annual shareholders meeting.

"Going into a new market with a bunch of new stores is a dangerous thing to do," he said. "That's why acquisitions are important. But you have to protect your market. We can get into a small town before it can support one of our competitors. We do need to keep adding stores to keep up with the market."

Smith said Food Lion's strategy of flooding a market with smaller stores offers customers what they want most -- convenience.

"People want stores that are close by," he said. "That just falls right into our hands."

Smith said Food Lion helped the bottom line in 1997 by cutting its losses in the Southwest -- shutting down the division and 61 stores in Louisiana, Oklahoma and Texas.

Food Lion conceded that its efforts there were impeded by a damaging news report on ABC's "Prime Time Live" program as well as a battle with the United Food and Commercial Workers Union. He said the company's Kash 'n Karry acquisition had also begun to turn a profit in the fourth quarter of 1997.

As reported, Food Lion topped the $10 billion sales mark for the first time last year. Officials said that figure was up 13.2% over the prior year, while the average increase in the supermarket industry was a mere 1.5%.