Food Lion 2006 Annual Report Download - page 5

DELHAIZE GROUP / ANNUAL REPORT 2006 3
of success. Food Lion will build on its customer segmentation
effort. Development of the assortment in general, and private
label, convenience and health products in particular, will continue
at full pace, both in our operating companies individually and at
the regional and Group level.
In 2007, safeguarding and reinforcing our competitive price
position will remain a key priority in each of our markets. In
early 2007, Delhaize Belgium took an important step forward by
having its price comparison method certifi ed by an independent
consumer organization, thereby confi rming the competitive price
position of our Belgian activities.
Based on the success and experience of the remodeling activities
over the past few years, our operating companies will continue
their store and market renewal initiatives in 2007. Food Lion
plans to renew stores in two key markets: Norfolk, Virginia, and
Myrtle Beach, South Carolina. All remaining Kash n’ Karry stores
are expected to be converted to Sweetbay before the end of 2007,
fi nalizing the major conversion project started in 2004. Delhaize
Belgium will convert 26 Cash Fresh stores to Delhaize banners.
In total, our operating companies plan to remodel approximately
235 stores in 2007.
Top-line growth in existing stores, however, is only one part of
the story. We will combine this with an aggressive expansion
program. In 2007, we plan to accelerate the number of store
openings, investing EUR 825 million in capital expenditures
in 2007, of which USD 755 million will be allocated to our U.S.
business. We will also continue to scan the market for interesting
fi ll-in acquisitions, as we have done in recent years.
Best-in-class execution supports sales growth and profi tability.
Delhaize Belgium will increasingly benefi t from the inventory and
margin management system ACIS, which has proven its value at
Pierre-Olivier Beckers,
President and Chief Executive Offi cer
Georges Jacobs,
Chairman of the Board of Directors
Georges
Jacobs
Pierre-Olivier
Beckers
Hannaford and Food Lion and was implemented in Belgium in
2006. Disciplined cost management remains another key focus.
Food Lion efforts in energy reduction, for example, have allowed
us to save USD 191 million since 2001 and have supported Food
Lion’s efforts to maintain and reinforce its aggressive pricing. We
will also leverage the expertise of our Group and our different
operating companies in as many areas as possible: sales,
procurement, systems and people development. Ongoing cost
savings and synergies will be key drivers in fi nancing further
price reductions, sales initiatives and innovation.
In addition to excellent operating and fi nancial results, our Group
is committed to operate as a good corporate citizen. We want
to offer our associates an attractive working environment, with
opportunities for learning and career development as well as
recognition for their accomplishments. We will reinforce our
efforts to limit the ecological footprint of our activities and to
support the communities in which we operate. A typical example
is our decision to start using green energy in all our Belgian
company-operated stores, distribution centers and headquarters
from early 2007 on. Good governance and transparency towards
all our stakeholders will remain the foundation of our business
in 2007.
We thank everyone who has contributed to making Delhaize
Group a stronger company, and look forward to continued
collaboration and success in 2007 and beyond.
Triple Anniversary in 2007
In 2007, Delhaize Group celebrates a triple anniversary:
140 years Delhaize Group, founded in 1867
50 years Food Lion in the U.S., founded in 1957
50 years supermarkets in Belgium, the fi rst one being
opened in Brussels by Delhaize in 1957
To learn more about Delhaize Group’s history and these
anniversaries, please visit our renewed corporate website,
www.delhaizegroup.com