Delhaize Consolidates to Strengthen Food Lion Banner

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January 17, 2012

Belgian-based Delhaize plans to strengthen its U.S. stores by closing underperforming units, rebranding some and eliminating the Bloom banner as it accelerates rollout of the Food Lion store brands strategy.

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.”

In all, the company will close 126 stores and will accelerate the roll out of the Food Lion store brand strategy in an additional 600 to 700 stores. The company is also completely retiring its Bloom banner. Of the store closures, 113 are underperforming Food Lion stores, primarily in markets in which the company has the least store density. Meanwhile, 64 Bloom and Bottom Dollar Food stores in Maryland, North Carolina and Virginia will be converted to the Food Lion banner. The company will also discontinue operations of its distribution center in Clinton, Tenn.

Delhaize America will no longer operate the Food Lion banner in Florida, but will continue operations of its Sweetbay and Harveys stores in the state. All affected stores will close within 30 days, and store conversions will begin immediately. Once completed, Food Lion will operate in 10 states and have 1,127 stores.

Bottom Dollar stores will remain as smaller format units, averaging 18,000 square feet. "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."

Delhaize’s support of the Food Lion name extends to private label. The retailer is currently running a super sale on store brand products through Feb. 7. The more shoppers buy, the more they save with an average savings of 25 cents per item, a minimum purchase of four items and maximum of 40 items and $10 discount per trip.

SBD Views: File this one under “a tough decision to improve strategic positioning.” The decision to close underperforming stores is never easy. In fact it’s too frequently avoided, which leads to bigger problems and more drastic eventual action. The decision to prune the Delhaize portfolio of underperforming stores and focus assets on the Food Lion banner is a smart strategic move. -- John Failla for Store Brands Decisions

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