Revenue, comps rise for Delhaize America in Q3
SALISBURY, N.C. — Network growth and higher retail inflation prompted growth in both revenues and comparable-store sales for Delhaize America, the U.S. division of Delhaize Group, for the third quarter ended Sept. 30.
Revenues realized a gain of 3.5% to $4.9 billion, compared with the year-ago period, while comparable-store sales jumped 1.9%. Delhaize, however, acknowledged that due to the economic environment and the decrease of consumer confidence, particularly in the southeastern United States, volume trends were down from the previous quarter.
The company also noted that operations were disrupted by Hurricane Irene, which resulted in the closing of 350 Food Lion stores for several days. Additionally, Delhaize America also accrued $10 million in other operating expenses — mainly due to product losses and inventory write-offs — which were partially offset by impairement reversals (worth $5 million) at Sweetbay banner stores.
Despite these setbacks, the company forged ahead with its relaunch of 200 Food Lion stores in Raleigh, N.C., and Chattanooga, Tenn., pilot markets, reporting that comparable-store sales growth increasingly outpaced the rest of the network, despite the additional price investments in the stores. Delhaize America said the company "intends to have completed the roll out of this work to between 700 and 800 stores in total by the end of 2012."
Delhaize America also said that its Bottom Dollar Food stores in Philadelphia have garnered positive feedback, while its Northeast Hannaford stores also saw a good performance, which was in line with the trends seen in the previous quarter.
Commenting on the results, Delhaize Group president and CEO Pierre-Olivier Beckers said, “We are pulling the right levers is evidenced by the momentum in the rebranded Food Lion markets that continue to deliver excellent results and outperform the rest of the network. At the same time, the economic environment, especially in the southeast of the U.S., continues to weigh on customer sentiment and their spending behavior.”
As of Sept. 30, Delhaize America had 1,640 supermarkets in operation.