Brussels-based Delhaize Group, operator of the Food Lion and Hannaford grocery chains, today reported strong fourth-quarter sales and noted it has been "especially pleased" with Food Lion's momentum. Its shares were boosted more than 8 percent by the positive news.
Delhaize, which operates about 3,500 stores in nine countries, said its total fourth-quarter revenue inched up by 0.1 percent to 5.34 billion euros ($7.2 billion).
In the U.S., revenues increased by 2.8 percent to $4.3 billion. Comparable store sales growth was 2.8 percent, despite retail inflation turning negative as a result of additional price investments that came as Food Lion launched phases four and five of its rebranding efforts. At Hannaford, both comparable store sales growth and real growth were positive as a result of price investments and increased promotions, despite a more difficult competitive environment in the Northeast.
For the full year 2013, Delhaize America generated revenues of $17.1 billion (€12.9 billion), an increase of 1.9 percent over 2012, supported by comparable store sales growth of 2 percent.
On May 28, 2013, Delhaize Group reached an agreement with Bi-Lo Holdings on the divestiture of Sweetbay, Harveys and Reid’s (in total 154 stores), and the leases of 10 previously closed Sweetbay locations. The company said it expects the transaction to be completed during the first half of 2014.
Frans Muller, who replaced Pierre-Olivier Beckers as president and CEO of Delhaize Group in November 2013, noted, "Our fourth quarter 2013 sales were strong both in the U.S. and in Belgium. In the U.S., where volume growth continued to be positive, we were especially pleased with Food Lion's momentum. The phase repositioning, started almost three years ago, is meeting our expectations, and we look forward to further developing Food Lion's customer proposition this year."
Muller added that in 2014, the company plans to "further reduce complexity and costs, remain disciplined with respect to capital allocation and ultimately continue to deliver healthy free cash flow."