Food Lion's Parent Delhaize America Announces Strategic Changes and Store Closings
01/13/2012 – Salisbury, N.C. – Delhaize America has announced key strategic actions to strengthen its U.S. portfolio including store closings, rebranding and operational changes. The company announced this week it plans to take the following actions with respect to its stores:
- Close 113 underperforming Food Lion stores
- Retire the Bloom banner
- Convert 64 Bloom and Bottom Dollar Food stores in Maryland, North Carolina and Virginia to Food Lion stores
- Close seven underperforming Bloom stores and six underperforming Bottom Dollar Food stores in overlapping Food Lion markets
- Convert one Food Lion store in Florida to a Harveys store;
- Discontinue operations of its distribution center located in Clinton, Tenn.
- Accelerate the roll out of the Food Lion brand strategy in an additional 600 to 700 stores.
"Today's actions will continue to solidify our U.S. operations and enable our company to focus on our successful brand strategy repositioning at Food Lion and the expansion of Bottom Dollar Food in new markets," said Ron Hodge, CEO of Delhaize America. "While these were difficult decisions given the impact on our associates, customers and communities, we believe these actions will enable us to better serve our customers in our markets with high density, while positioning the company for future growth."
As a result of these actions, approximately 4,900 associates will be displaced. The company will provide severance to eligible associates, and will work with government officials to assist with transition support. Associates are also encouraged to apply for open positions within the company. Most associates working at converted stores will continue to work at these locations.
"Food Lion is focused on repositioning our business for future growth," said Cathy Green Burns, president of Food Lion. "By closing underperforming stores, we will continue to position Food Lion for success, especially in light of our brand strategy results. We are very pleased with the reaction from our customers on the implementation of our new brand strategy work, which includes being recognized as a price leader, making our stores easier to shop, offering the greatest value in private brands and providing fresh produce. However, we also determined the most successful markets for these investments are areas where we have strong store density or high market share. As we move forward with implementing our strategy this year, Food Lion will launch its next market this quarter and expects to be substantially complete by year-end. We look forward to accelerating the Food Lion strategy and bringing the strategy to life in an additional 600 to 700 stores."
Additional Information on Bottom Dollar Food
Delhaize America is converting 22 Bottom Dollar Food stores in Maryland, North Carolina and Virginia to Food Lion stores, and closing six underperforming stores in North Carolina and Virginia. Their goal is to focus on markets that provide the greatest opportunity for growth for the banner, including Philadelphia, Pittsburgh and Youngstown, Ohio. The Bottom Dollar Food stores being closed or converted are the banner's larger format stores. By making these changes, Bottom Dollar Food will now operate its business with smaller format stores of about 18,000 square feet, which have proved to be more successful formats for the banner.
Additionally, Bottom Dollar Food plans aggressive growth for the brand over the next five years. By the spring, Bottom Dollar will open 14 stores in Pittsburgh and Youngstown, Ohio. The company expects to open another 10 to 15 stores by year-end in its new markets.
"Bottom Dollar Food is a strong, emerging banner that is continuing to grow and be successful in our new markets," said Meg Ham, president of Bottom Dollar Food. "Customers have been very receptive to our discount-grocer model, which includes a smaller format, the most popular national brands, a wide selection of private brand products, and fresh produce and quality meats at unbelievably low prices. We look forward to continuing to grow and win in our new markets."
Additional Information on the Closing of the Distribution Center
The company is closing its distribution center located in Clinton, Tenn., as a result of the reduced number of Delhaize America stores. However, the company will continue to maintain a transportation facility at this location to support its transportation network. The distribution center operations will discontinue during the first quarter of this year as the company works to scale back operations at this location and transition distribution to other locations, primarily to the company's Elloree, S.C., Salisbury, N.C., and Dunn, N.C., facilities.
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