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BRUSSELS — The Delhaize Group posted third quarter financial results driven by strength in U.S. sales, which offset weakness in Belgium, where same-store sales slid 5%, the company said on Thursday.
The Delhaize Group posted third quarter financial results driven by strength in U.S. sales, which offset weakness in Belgium, where same-store sales slid 5%, the company said on Thursday.
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The retailer also said it had agreed to sell 66 Bottom Dollar Food store locations to German discount retailer Aldi, which is in the early stages of a strategic growth plan in the United States.
Delhaize said adjusted operating profit rose 2.4% in the quarter. Same-store sales in the United States climbed 5.3% at its Food Lion and Hannaford banners, up from a 3.3% gain in the second quarter. Officials said they expect sales growth to continue in the fourth quarter.
Food Lion introduced its new "Easy, Fresh and Affordable" concept at 31 outlets in the period, and customers have responded favorably, the company said.
The update is part of the retailer’s effort to win more of its shoppers’ overall food spend and is meant to augment recent investments in price and service.
Food Lion officials announced the strategy earlier this year and said they intended to introduce it chainwide.
Delhaize gets about 60% of its revenue from its U.S. operations.
After selling its Bottom Dollar Food stores in the greater Philadelphia and greater Pittsburgh areas, Delhaize will no longer operate stores in the deep-discount segment of the grocery market.
Bottom Dollar Food is the latest Delhaize America food store to be sold or shut down. Earlier this year Delhaize sold its Sweetbay, Harveys and Reid’s locations to Bi-Lo Holdings LLC for $246 million.
Once the deal for the Bottom Dollar Food stores goes through, Delhaize America will have two banners — Food Lion, with 1,100 supermarkets in the Southeast, and Hannaford, with 180 stores in the Northeast.
Delhaize officials said sale of the Bottom Dollar Food stores fetched about $15 million. Delhaize said it would take an impairment of about $180 million on the sale, which it expects to close early next year.
The Bottom Dollar Food stores will close and the name will be retired at the end of the year, the company said. The 2,200 employees will be offered severance pay.
"I would like to thank our Bottom Dollar Food associates for their hard work and dedication to their customers," said Frans Muller, president and chief executive officer at Delhaize. "The divestiture of Bottom Dollar Food further simplifies our business, increases debt capacity and creates shareholder value. Today’s announcement is consistent with our strategy, announced in March, of investing in and focusing on our core markets."
