Food Lion 2008 Annual Report Download - page 6
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Please find page 6 of the 2008 Food Lion annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.2 - Delhaize Group - Annual Report 2008
Letter from the Chairman and the Chief Executive Officer
Delhaize Group again posted solid revenue growth in 2008. Most of our operating companies accelerated
their growth despite the more difficult economic environment. At identical exchange rates, revenue growth
was 4.1% on a comparable basis. Due to the many sales building measures such as our accelerated private
brand roll-out, improved price competitiveness and many store remodelings, consumers have stayed loyal to
our stores.
In many ways, 2008 has been an extraordinary year. Consumers felt the
rising pressure of inflation, the threat of increasing unemployment and
declining real estate and financial market values. However, Delhaize
Group was able to demonstrate its ability to face these short-term
challenges while staying the course for the long term.
Revenue growth was supported by many initiatives. Private brand
revenues increased particularly in the U.S., where our operating
companies benefited from the introduction of a three-tier private brand
program. In Belgium, the private brand assortment was renewed as
well, and now also includes three tiers with an extended first price line
under the brand
365
. Consumers also reacted positively to the price
investments we made at all our operating companies.
In 2008, our Group continued the development of new store concepts.
In Greece, our Group launched a new brand called Lion Food, a
convenient store format with low prices. In the U.S., Food Lion launched
a new prototype for its innovative Bottom Dollar Food brand and just a
few months ago, Delhaize Group opened in Belgium a totally new store
concept called Red Market, combining high quality products, ease of
shopping, helpful associates and very low prices.
In 2008, our store network grew by 128 stores to 2 673 stores at year-end,
the highest growth since 7 years. In the U.S., the Group re-launched
161 stores after remodeling or expansion work. All Food Lion markets
renewed in 2007 reported comparable store sales growth above the
Company’s average. In Greece and Romania, we strengthened our
market positions through the acquisition of a total of 43 stores. The
acquisition of Plus Hellas in Greece included a brand new distribution
center that will serve as a basis for further expansion in Northern
Greece.
Thanks to a combination of gross margin improvements and thorough
cost management, our Group maintained its operating margin at
industry high levels. The Group’s operating profit increased 2.1% at
identical exchange rates.
Based on our performance, our strategy for the future and our confidence
in the Company’s continued success, the Board of Directors will propose
to the Ordinary General Meeting on May 28, 2009 to increase the
dividend by 2.8% to EUR 1.48 (EUR 1.11 net of 25% Belgian withholding
tax).