Food Lion 2005 Annual Report Download - page 28

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DELHAIZE GROUP / ANNUAL REPORT 2005
26
EMERGING
MARKETS
Optimized assort-
ment to increase
differentiation,
particularly
in fresh offer
Launched new
store concept in
Indonesia
Delhaize Group’s activities in Em erging Markets ( Czech
Republic, Romania and Indonesia) posted 5.7% net
sales and other revenues growth, due to strong sales
performance in Romania and Indonesia. Contribution to
the Group’s operating profi t was slightly negative, due to
weak results in the Czech Republic.
In June 200 5, Delhaize Group sold its 11 Delvita stores
in Slovakia to the Germ an Rewe Group, allowing Delvita
to focus fully on its Czech operations.
CZECH REPUBLIC
In the Czech Republic, Delvita opened three new stores
and closed six underperform ing ones, resulting in a net
decrease of the network by three to a total of 94 stores.
While further reinforcing its widely-recognized differ-
entiation in assortm ent, convenience and service, the
Company also focused intensively on improving its price
competitiveness and profi tability by increasing effi ciency
and productivity.
To increase effi ciency, the Company reorganized its store
network around three store concepts: the Delvita super-
m arket, the urban Delvita City stores and the Delvita
Proxy convenience store.
An im portant effort in 20 05 centered around the effi -
cient assortm ent project. The total number of references
was reduced by approxim ately 10% . More effi cient
ways of displaying and shelving (m ini-pallets, baskets,
cardboard boxes) resulted in higher in-store productivity.
The leaner and m ore transparently displayed assortm ent
also m ade it m ore convenient to customers.
Delvita launched a series of im provem ents from its
smart retailing project and invested signifi cantly in its IT
infrastructure and logistic system s, thereby benefi ting
from system s and tools developed in cooperation with
other operating com panies of the Group.
This strict focus on effi ciency allowed Delvita to reinforce
its price positioning. In order to offer customers better
value, the Company further developed its private label
offering. Delvita private-label products already represent
m ore than 10% of total sales. The number of “365 ”
products at Delvita increased to 250 , thus offering cus-
tom ers a low-priced range of quality basic products.
Continued to
focus on price
competitiveness
NUMBER OF STORES
-10
NET SALES AND
OTHER REVENUES*
+5.7%
OPERATING PROFIT*
N/ A
OPERATING MARGIN
-113 bps
2005 2004
156 166
2005 2004
400.1 378.4
* in millions of EUR
2005 2004
(0.9) 3.5
2005 2004
-0.2% 0.9%
2005 HIGHLIGHTS