Food Lion 2009 Annual Report Download - page 7

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low-cost supermarket format with the opening of two Red Market stores
in Belgium and one in Romania. More will come in 2010.
In 2009, our store network grew by 59 stores to 2 732 stores at year-
end. We also continued to seize opportunities in our markets and to
strengthen our market positions through acquisitions. In Greece, we
acquired a small chain of 11 supermarkets and a distribution center,
whereas in Bucharest, Romania, we added four supermarkets to the
network. Our efforts to obtain all the shares of Alfa Beta in Greece led
to the acquisition of an additional 24.7% of the minority shares. The
Balkans are an area that we have clearly marked for future accelerated
growth. During the year, we acted decisively to respond to the short-
term pressures of the global economy, taking steps to manage our
costs tightly and use the savings to fund price investments and sales
building initiatives. Through a sustainable combination of gross margin
improvements with thorough cost management, our Group was able
to maintain its operating margin at industry-high levels. The Group’s
operating profit increased by 4.2% at actual exchange rates.
Based on our solid 2009 performance, our clear strategy for the future
and our confidence in the Company’s strong banners, the Board of
Directors will propose to the Ordinary General Meeting on May 27, 2010
to increase the dividend by 8.1% to EUR 1.6, EUR 1.2 net of 25% Belgian
withholding tax.
Over its recent history, our Group has created a strong platform of
leading brands and market shares, best-in-class industry profitability
and a solid balance sheet. All of these together form a launching pad
that can now enable us to accelerate our growth and to capitalize on
these strengths. Our Group is ready to deal with the changed consumer
environment and competitive and economic challenges. That is why we
have rallied our operating companies around a ”New Game Plan,” a
comprehensive approach to achieve superior revenue and operating
profit growth.
Our ”New Game Plan” is developed around four breakthrough themes,
the first one being operating as one Group based on a common vision
and a common set of values around which we mobilize our associates.
The plan aims at accelerating growth through a greater emphasis on
price competitiveness resulting in value leadership in all our markets. All
our operating companies are planning new and more aggressive pricing
strategies from the start of 2010 to further narrow the gap with each
market’s leading price competitor. We will further maximize sales within
our existing stores and continue to respond to consumers’ increasing
interest for health and wellness and corporate responsibility.
Our revenue growth will be further accelerated by additional drivers
including our low-cost supermarket formats, Bottom Dollar Food and Red
Market and our newer markets of Greece, Romania and Indonesia. In
these newer operations, our Group plans to triple the openings in these
newer operations to 250 new stores over the next three years. Already
in 2010, our Group plans to open 120 to 130 new stores and to remodel
approximately 100 stores. Our operating companies will continue to
focus on targeted acquisitions to reinforce our densities in existing and
adjacent markets. Next year, our Group plans approximately EUR 800
million in capital expenditures, a significant step-up compared to EUR
520 million in 2009. These investments will continue to focus on store
openings, renewals and innovation across all aspects of our operations.
Growth acceleration will be made possible by excellence in associate
development. We will continue to leverage our Group’s signature training
and career development programs. We are convinced that our Group’s
strong culture will further strengthen our 138 000 associates’ best-in-class
sense of engagement and commitment.
To fund this growth program, Delhaize Group will become even more
nimble as an organization. We plan to increase efficiencies through
executional excellence. The initiatives to accelerate growth will be funded
by cost savings. We have a respectable track record when it comes to
cost optimization, having achieved EUR 60 million in cost reductions in
2008 and EUR 100 million in 2009. Our plan is to reach EUR 300 million
in additional annual gross SG&A savings by 2012, largely the result of
efficiencies at regional or global levels. A case in point is the recently
announced transformation of our independent U.S. companies into
"Delhaize America," one integrated organization with shared services,
but unique go-to-market strategies. For our Group this is without any
doubt the most significant event at our U.S. operations since the buyout
of the minority shareholders in the U.S. in 2001. On the other side of the
Atlantic, Delhaize Belgium will continue its successful “
Excel 2008-2010”
plan to drive sales and increase efficiencies.
True to our heritage of being connected to the communities in which we
operate, our Group is committed to give back to society. All our operating
companies have programs that are a testimony to their local integration
and corporate responsibility. In 2009, we published our second
Corporate Responsibility report which again included an impressive list
of achievements in this domain.
To conclude, we want to thank you, our shareholders, for your confidence
and support. Although we cannot control the macro-economic
environment, we are in control of our business. Our ”New Game Plan”
will position Delhaize Group to come out of these difficult economic times
not only as the highly profitable food retailer it is already today, but also
as one of the fastest growing food retailers.
Count Jacobs de Hagen,
Chairman of the
Board of Directors
Pierre-Olivier Beckers,
President and
Chief Executive Officer
> Financial Highlights > Profile > Letter from the Chairman and the CEO > Overview of Operating Companies > Our New Game Plan > Our Vision and Values
…TO A NEW GAME
PLAN FOR YEARS TO
COME
› Operating as One Group
› Accelerating Growth
› Excelling in Associate Development
› Pursuing Executional Excellence
DELHAIZE GROUP AT A GLANCE OUR STRATEGY OUR ACTIVITIES IN 2009 CORPORATE
GOVERNANCE STATEMENT RISK FACTORS FINANCIAL STATEMENTS
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