Food Lion 2008 Annual Report Download - page 43
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2006
2006
2006
2007
2007
2007
2008
2008
2008
1481 030
159
1 173
2011 335
OUTLOOK FOR 2009
› Add 16 stores for a total of 217
› Further reinforce differentiation in
assortment and service
› Continue to learn from Lion Food
stores
Market
In 2008, the real gross domestic product
of Greece increased by 2.8%, compared
to 4.1% in 2007. Compared to 2007, the
unemployment rate continued to decline
from 8.3% to 8%. Overall inflation was 5.5%
(2.9% in 2007) and national food inflation
amounted to 4.8% (3.2% in 2007)
(1)
.
Strategy
Alfa-Beta strives to be the preferred
Greek food retailer. Its stores offer a large
assortment including fresh and organic
products and local specialties. Alfa-Beta is
known for its modern facilities, high quality
service and convenience. The Company
operates a rapidly growing multi-format
store network throughout Greece comprising
supermarkets, proximity stores and cash and
carry stores.
In 2008, Alfa-Beta has opened 2 new concept
stores, called Lion Food Stores. These stores
enable customers to shop quickly and
conveniently and offer attractively priced
private brand products and national brands.
Alfa-Beta intends to implement some of
the learnings from these stores in other
supermarkets.
Store Network
In 2008, Alfa-Beta added 42 stores to its
network, including 8 company-operated
supermarkets and 5 affiliated convenience
stores. At the end of 2008, the Alfa-Beta
store network consisted of 201 stores.
Alfa-
Beta reinforced its presence in the North of
Greece where it was less present through the
acquisition of Plus Hellas. As a result, 29 stores
and a new distribution center were added
to the network. The brand new distribution
center provides the necessary capacity for
rapid growth in the North of Greece.
Alfa-
Beta’s total capital expenditures increased
from EUR 37 million in 2007 to EUR 88 million
in 2008, partially to remodel the acquired
Plus Hellas stores.
Performance
In 2008, Alfa-Beta posted revenues of
EUR 1.3 billion, an increase of 13.8% compared
to 2007. This was the third consecutive year of
double-digit revenue growth. This outstanding
performance was the result of excellent
comparable stores sales growth and the
continued expansion of the store network.
Alfa-Beta’s market share increased from
+13.7%
in 2007 to 14.5% in 2008 (source: AC
Nielsen).
Alfa-Beta continued to reinforce its product
range, including organic products and private
label items. Mid 2008, Alfa-Beta invested
in price cuts, responding to the needs of
consumers under increasing pressure. Alfa-
Beta further improved its service offering by
installing price checkers and new check-out
software. It executed a dynamic remodeling
and store opening program. Alfa-Beta also
continued to invest in store and supply chain
efficiency. In 2008, it acquired a plot of land on
which a new storage and distribution centre
for fresh products will be constructed.
In 2008, gross margin decreased by
24 basis points to 22.7% mainly due to
higher warehouse expenses, and the effect
of price investments made in the summer.
Selling, general and administrative expenses,
increased by 118 basis points to 20.0% of
revenues, largely as a result of the Plus Hellas
acquisition. The operating margin of Alfa-Beta
decreased from 4.4% in 2007 to 3.4% in 2008,
again largely due to Plus Hellas. Operating
profit decreased by 10.6% to EUR 46 million.
Alfa-Beta strives to
be the preferred
Greek food retailer.
Number of Stores
Revenues (in millions of EUR)
3.2
4.4
3.4
Operating Margin (% of revenues)
Delhaize Group Our Strategy
Our Activities in 2008
Corporate Governance
Risk Factors
Financial Statements Shareholder Information
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(1)
Source: General Secretariat of National Statistical Service of Greece