Food Lion 2001 Annual Report Download - page 38

In 2001, for the first time, sales of
Delhaize Group’s European operations
outside Belgium exceeded the EUR 1
billion mark. Sales increased by 13.7% to
EUR 1.1 billion largely influenced by the
acquisition of Trofo, but partially offset by
the divestiture of the French subsidiary P.G.
in 2000. In 2001, Delhaize Group increased
the number of European stores outside
Belgium by 47, bringing the year-end total
to 224 stores.
In 2001, cash flow from operations of this
Delhaize Group division amounted to EUR
46.6 million compared to EUR 51.3 million
in 2000. The decrease was related to the
divestiture in 2000 of the profitable French
company P.G. and the lower profitability of
Trofo at the time of its acquisition. Cash
earnings of the other European operations of
Delhaize Group were negative by EUR 6.8
million due to the restructuring of Delvita
and integration costs associated with Trofo.
Alfa-Beta | The acquisition in
January 2001 of Trofo, the sixth largest
supermarket chain in Greece, made
Alfa-Beta the second largest food retailer in
Greece. Alfa-Beta ended 2001 with a sales
network of 104 stores, compared with 53
stores at the end of the previous year. The
104 stores include supermarkets operated
under the Alfa-Beta and Trofo banners and
cash & carry stores operated under the
ENA banner. Alfa-Beta increased its selling
area by 120.9% to 146,000 square meters,
while its geographical presence expanded
from 11 to 23 Greek cities.
Through the end of 2002, the major focus
of Alfa-Beta management will continue to
be on the integration of Trofo. Since March
2001, all procurement is centralized; the
Trofo stores operate on the same
information technology systems as
Alfa-Beta, and prices in the Trofo stores are
aligned with the Alfa-Beta stores. In April
2001, all supporting departments of Trofo
and ENA were centralized in Alfa Beta’s
operations. Since the end of June 2001,
Alfa-Beta’s central warehouse manages the
distribution to the Trofo stores.
By the end of 2001, the former Trofo
operations were an integrated part of
Alfa-Beta, following Alfa-Beta’s strategy of
high quality standards and value for money.
Customers reacted positively to the merger,
reflected in quickly improving sales figures
in the remodeled stores under the Alfa-Beta
banner. The “Year of the Kangaroo,”
named after Trofo’s trademark , has
become a springboard for future success of
Alfa-Beta in Greece.
The management of Alfa-Beta also
remained focused on its existing network.
This was reflected in continuous product
assortment improvements, a broadening of
organic offerings, innovation in private
label products and a leveraging of the
successful loyalty card, which accounts for
75% of total sales. Alfa-Beta developed
new initiatives using customer data
management and micro-marketing
strategies to create a strong customer
relationship management program that
36 |Delhaize Group |Annual Report 2001
Membership EMD
In March 2001, Delhaize Group’s European
operations joined EMD. With its combined
sales of over EUR 120 billion and a market
share of more than 14%, EMD is the
largest European buying organization with
members in 15 countries. The EMD
membership allows Delhaize Europe to
obtain better knowledge of food products
pricing and to leverage EMD’s purchasing
power when buying basic food or national
brand products. EMD also has its own
private label assortment that will be
launched in 2002 in Delhaize Group.
Streng
2001 was a year of strengthening for the European operations of
retailer through the acquisition of Trofo, while
Rest of Europe