Food Lion 2013 Annual Report Download - page 37

Performance
For the full year 2013, Delhaize America gen-
erated revenues of $17.1 billion (€12.9 billion),
an increase of 1.9% over 2012 in local currency
supported by comparable store sales growth of
2.0%. In 2013, the U.S. gross margin decreased
by 15 basis points to 25.9% as a result of price
investments, at both Food Lion and Hannaford.
Selling, general and administrative expenses
as a percentage of revenues increased by
6 basis points to 22.6% mainly as a result of the
reduction of the U.S. bonus accrual in the third
quarter of 2012 which was largely offset by cost
savings. The underlying operating margin
of our U.S. business decreased by 29 basis
points to 3.7% as a result of price investments,
slightly higher SG&A and higher other oper-
ating expenses. Underlying operating profit
decreased by 5.3% to $639 million (€481 mil-
lion). Operating margin was 3.4% mainly as a
result of $53 million (€40 million) restructuring,
fixed asset impairment charges and store
closing expenses.
Food Lion
Food Lion is the largest banner within the
Delhaize Group banner portfolio. The super-
market chain operates 1 124 stores in 11 states,
including 11 Reid’s stores. The DNA of Food Lion
is based on its strong store network, offering
a broad assortment at low prices. In 2013,
the brand respositioning work that kicked off
in 2011 was completed. As a result, the entire
Food Lion network now embodies and reflects
the Simple, Quality and Price elements. Look-
ing at the performance of Food Lion in 2013,
the efforts have clearly resulted in material
revenue uplift. In order to fully benefit from this
trend, Food Lion launched, at the end of last
year, a new round of initiatives, based on the
notions Easy, Fresh and Affordable, that should
result in a continuation of top line growth.
Hannaford
Since it was acquired in 2000 by Delhaize
Group, Hannaford has maintained its strong
position in the Northeast of the U.S., particu-
larly in Maine, New Hampshire, and Vermont.
Known for the quality of its assortment and
a high service level, Hannaford serves its
customers through a network of 183 stores. In
2013 the banner took important measures to
retain its customers´ share of grocery spend-
ing, through improving the value proposition
and increasing customer service levels.
Bottom Dollar Food
Bottom Dollar Food is the fastest growing
banner of Delhaize Group in the U.S. The
discount format operates 62 stores, offering a
limited but convenient assortment of national
and private brand products, fresh meat and
produce. The banner’s differentiator, on which
Bottom Dollar Food prides itself, is offering its
customers the lowest price through its “We
won’t be beat” price guarantee policy. The
store footprint is concentrated in the two most
densely populated markets of the state of
Pennsylvania, Philadelphia and Pittsburgh.
In 2013, 6 new stores were opened.
SWEETBAY,
HARVEYS AND
REID’S
In a highly competitive environment,
Delhaize Group continually needs to
make choices about where and how it
can best deploy its available resources.
That is why, in 2013, Delhaize Group
decided to divest the banners of
Sweetbay, Harveys and Reid’s. The
transaction was announced in the
second quarter of 2013 and is expected
to close in the first half of 2014. In total,
154 stores will be divested for a total
consideration of $267 million in cash,
subject to other customary adjustments.
KEY FIGURES (AS OF DECEMBER 31, 2013)
1 124(1) 183 62 72 73
Southeast and
Mid-Atlantic
Northeast New Jersey, Ohio,
Pennsylvania
Georgia, Northern
Florida, South Carolina
Westcoast
of Florida
sq.ft.
25 000 - 45 000 25 000 - 55 000 18 000 - 20 000 25 000 - 45 000 25 000 - 50 000
15 000 - 20 000 25 000 - 46 000 6 000 - 8 000 15 000 - 20 000 28 000 - 42 000
DELHAIZE GROUP ANNUAL REPORT 2013 UNITED STATES 35
(1) Including 11 Reid’s stores.