Food Lion 2007 Annual Report Download - page 41

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Performance
In 2007, revenues of Delhaize Group’s U.S.
companies grew by 5.1% to USD 18.2 billion
(EUR 13.3 billion). Comparable store sales
increased by 3.8%. Sales were strong at Food Lion
and Hannaford throughout the year. Sales at most
Sweetbay stores gained momentum during the
second half of 2007 due to the fi nalization of the
conversion program and major price reductions.
Gross margin increased by 20 basis points
to 27.4%, due to a combination of sales mix
improvements, particularly as a result of higher
sales in fresh produce and private brand products
at Food Lion, margin optimization at Food Lion and
excellent inventory management at Hannaford.
OUR U.S. STORES
OFFER A LARGE
FOOD VARIETY,
EXCELLENT SERVICE,
COMPETITIVE
PRICING AND
A CONVENIENT
LOCATION AND
STORE LAYOUT
These gross margin improvements were partially
offset by price investments at Hannaford and
Sweetbay. Selling, general and administrative
expenses as a percentage of revenues increased by
16 basis points, due to increased payroll expenses,
higher advertising expenses and rising fuel prices.
Operating margin increased by 7 basis points to
5.6% and operating profi t grew by 6.4%.
DELHAIZE GROUP / ANNUAL REPORT 2007 39