Food Lion 2001 Annual Report Download - page 31

A Model of Synergy
The Butner, North Carolina distribution center reflects the benefits
that are derived when the Delhaize America companies work
collectively. Food Lion purchases the products while Hannaford
oversees warehouse and transportation operations. With over 200
associates and a state-of-the-art computerized conveyor system, the
distribution center supplies health and beauty care merchandise to
all the Food Lion stores. The success in terms of cost effectiveness
and operational efficiency has emboldened the companies to look
ahead to the next phase of the project in 2002: the addition of
general merchandise and specialty foods to Butner.
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feasibility and customer acceptance of self-
scanning. Early in 2002, this test will be
expanded to approximately 50 stores.
In addition, Food Lion is committed to
offering a quality assortment of the
everyday products customers request. Food
Lion continues to expand its core product
offerings by including a larger selection of
foods that appeal to the growing Hispanic
and Latino market and expanding its
locally grown produce program.
In September 2001, Food Lion opened a
prototype store in Concord, North Carolina,
focusing on convenience and the total
shopping experience. The store allows Food
Lion to test specific store design innovations
and examine their impact on customers.
Hannaford | It was a successful
year for Hannaford, which at the end of
2001, operated 114 supermarkets in five
states in the Northeastern United States.
During the year, Hannaford added six
stores to its sales network, one constructed
store and five acquired from Grand Union.
Following three years of intensive testing
and evaluation, Hannaford implemented its
“Festival for the Senses” strategy in its
Portland, Maine market in October of 2001.
The strategy is based on extensive
consumer research that identifies and
responds to the key aspects of the shopping
experience that are valuable to customers.
Hannaford focuses on a wide variety of
quality produce and meat, service and
sensory experience. Over 100 elements that
comprise the overall strategy were tested in
a Festival prototype store for over a year to
determine which ones are most effective in
drawing and retaining customers and
building sales. The success of Hannaford’s
new strategy can be seen in the increased
number of customers who shop the stores,
the ability to draw customers from well
outside a normal trade area, higher average
order size, an increase in the number of
departments shopped and high overall sales
growth.
As part of the strategy implementation,
seventeen of the chains’stores previously
named Shop n’Save Supermarkets were re-
named Hannaford Food and Drug between
October 28 and December 31, 2001.