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DELHAIZE GROUP / ANNUAL REPORT 2006 29
OPERATIONS
Food Lion
In 2006, Food Lion continued to reinforce its network, built
around four brands: Food Lion, a full-range low-price
supermarket; Bloom, a convenience-focused store concept
offering customers a wide variety of food products; Bottom
Dollar, a full-range deep discount supermarket with an
attractive store layout; and Harveys, a strong local grocer in
Central and South Georgia.
For the fi rst time in its successful series of market renewals,
Food Lion applied a multi-brand approach when renewing
approximately 80 stores in its Washington, DC market.Twenty-
fi ve Food Lion stores were relaunched; 14 Food Lion stores
were converted into Bottom Dollar and 29 into Bloom, with 11
additional Bloom stores opened in early 2007. Also in 2006,
Food Lion entered a new market – the fi rst one in 15 years
– Greenville-Spartanburg, SC, opening fi ve Bloom stores and
one Food Lion store based on the new prototype created in
2005, which will be used in all new Food Lion stores going
forward.
To support its multi-brand strategy and better match customer
profi les with store concepts, assortments and marketing,
Food Lion continued its customer segmentation work, started
in 2005 (see “In Focus” on p. 13 of this report).
Food Lion further reinforced its assortment. Bloom increased
the variety of its offering with the launch of a Bloom private
label line. The company also continued to roll out organic and
international food sections. At the end of 2006, Food Lion had
235 Nature’s Place, 1,100 Hispanic, 500 Asian and 170 Indian
food sections within its store base.
In order to keep prices low, while at the same time protecting
profi tability, Food Lion continued its efforts in cost management
and excellent execution.
2006 2005 Change
Number of stores 1,549 1,537 +12
Net sales and other revenues* 17,293.2 16,564.4 +4.4%
Operating profi t* 961.0 901.2 +6.6%
Operating margin 5.6% 5.4% +12bps
Capital expenditures* 663.5 571.1 +16.2%
Number of associates 108,883 104,667 +4.6%
OPERATING MARGIN (% OF SALES)
NET SALES AND OTHER REVENUES
(IN BILLIONS OF USD)
15.9 16.6 17.3
5.4 5.6
5.3
2004 2005 2006
NUMBER OF STORES
1,523 1,537 1,549
2004 2005
1,515
2003 2006
OUTLOOK
FOR 2007
OPEN APPROXIMATELY
47 NEW STORES
REMODEL 176 STORES
COMPLETE CONVERSION
OF KASH N’ KARRY TO
SWEETBAY BRAND
RENEW FOOD LION
MARKETS OF NORFOLK
AND MYRTLE BEACH
* In millions of USD
4.7
15.4
2003