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    Delhaize Group to Streamline Food Lion Operations and Close 42 U.S. Stores

    BRUSSELS, Belgium - Delhaize Group, the Belgian international food retailer, on Thursday said it will close 41 underperforming Food Lion stores and one Kash n' Karry by the end of January to protect Food Lion's future profitability and to strengthen its competitive position.

    BRUSSELS, Belgium - Delhaize Group, the Belgian international food retailer, on Thursday said it will close 41 underperforming Food Lion stores by the end of January to protect Food Lion's future profitability and to strengthen its competitive position. Additionally, the company will close one Kash n' Karry store.

    Delhaize also said Food Lion will implement additional cost saving initiatives by streamlining and optimizing the functioning of its support structure.

    "This pro-active cost reduction initiative represents a commitment to run an even more efficient operation", said Rick Anicetti, president and CEO of Food Lion. "The decision to close these under-performing stores and streamline the support structure will provide Food Lion with a healthier, more productive store base and the resources to defend our price position in order to grow sales."

    Exceptional pre-tax expenses in the range of $45 million to $55 million will be recorded in the first quarter of 2003 as a result of these actions, the company said.

    The announcement was made as Delhaize reported sales of EUR 20.7 billion ($21.73 billion) in 2002, a decrease of 3.3 percent, primarily because of the weakening of the U.S. dollar by 5.3 percent compared to 2001, along with weak sales at Food Lion and Kash n' Karry. Delhaize America's sales in dollars grew in 2002 0.9 percent on a comparable store sales decrease of 1.0 percent for the full year.

    In 2002, the contribution of Delhaize America to the sales of Delhaize Group was $15.0 billion, an increase of 0.9 percent over 2001. Comparable store sales declined by 1.0 percent in 2002, at the better end of the previously announced guidance. Sales evolved favorably during 2002 at Hannaford, the company said.

    In 2003, Delhaize America expects to open 52 new supermarkets, including five relocated stores. Approximately 82 stores will be remodeled or expanded. The total net selling area is expected to grow in 2003 by approximately 0.4 percent.

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