Food Lion 2009 Annual Report Download - page 22

18 - Delhaize Group - Annual Report 2009
Store Modernization
Store renewals are an important part of our total
capital expenditures. At Food Lion, our network is
renewed on a market-by-market approach. The
store renewals are done by taking into account
Food Lion proprietary customer segmentation meth-
odology that ensures the stores are remodeled to
reflect local customer needs. Stores that have been
re-opened following such a renewal, continued to
see above-company-average results in compa-
rable store sales. Food Lion renewed 5 stores in
the Daytona Beach, Florida market and 35 in the
Columbia, South Carolina market. Additionally,
Food Lion’s banners Bloom and Harveys remodeled
1 and 3 stores, respectively, whereas Hannaford
remodeled 9 stores. In the U.S. in total, 53 stores
Generating profitable revenue growth requires an up-to-date and attractive store network. That is why our
banners invest substantially in store renewal and network expansion. Our strong market positions are a direct
result of our customers’ appreciation of the formats, convenience and proximity of our stores.
Network Expansion and Renewal
were remodeled in 2009. In 2010, our U.S. banners
plan to modernize approximately 50 stores, of which
30 are part of Food Lion’s market renewal programs.
In 2009, Delhaize Belgium remodeled 14 stores and
plans another 20 store remodels in 2010. Alfa Beta
remodeled 4 stores in 2009.
Store Openings and Acquisitions
In the past year, our Group added 59 stores to its
worldwide network: 13 stores in the U.S., 17 in Belgium,
15 in Greece, 11 in Romania and 3 in Indonesia. At the
end of 2009, our store network consisted of 2 732
stores.
Our Group continued to fill in its markets with targeted
acquisitions. In Greece, we acquired 11 stores from
Koryfi, a local retailer. The stores are located in the
northeastern part of Greece where Alfa Beta had
a limited presence. In Romania, the dense store
network of Mega Image in the capital, Bucharest, was
extended with the perfect fill-in acquisition of 4 stores
formerly operated under the banner Prodas.
Trimming the Portfolio
Delhaize Group constantly monitors the performance
of its store network. Underperforming stores are
closed, and capital investment is redirected to
more productive activities to ensure that the level
of profitability of our network is maintained. During
2009, our U.S. operations closed 17 stores and
relocated 7 others, primarily at Food Lion. The Group
completed the sale of its 4 stores in Germany. As part
of the recently communicated reorganization of our
U.S. banners’ support operations, our Group decided
in 2009 to close 16 underperforming stores in 2010.
This includes 15 underperforming Food Lion stores
and 1 underperforming Bloom store.