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Delhaize Logs Positive 2004, Says Baltimore Next for Food Lion Renewal

BRUSSELS, Belgium -- Differentiation seemed to pay off for Delhaize Group in 2004, as the international retailer reported yesterday slightly higher comps, as well as organic sales growth, for the year in the U.S. and Belgium.

Delhaize, which in the U.S. is the parent company of Food Lion, Hannaford Bros., Kash n' Karry, and Harvey’s, reported total sales of EUR 18 billion, a 4.5 percent decrease vs. 2003, due to a 9.1 percent decline in the U.S. dollar exchange rate to the euro and an additional sales week in the U.S. in 2003.

Organic sales growth amounted to 2.9 percent, supported by 1.5 percent comparable store sales growth in the U.S. and 2.2 percent in Belgium.

"In 2004, all banners of Delhaize Group continued to focus with success on the differentiation of their store concepts, driving sustainable sales growth throughout the year," said Pierre-Olivier Beckers, president and c.e.o. of Delhaize Group, in a statement. "We have been particularly pleased with the sales results at all the U.S. banners and with Delhaize Belgium's continued strong performance. In 2005, we expect to continue to improve sales performance through sales initiatives and an increased schedule of store remodeling and store openings."

Delhaize also named Baltimore, Maryland as the latest market set for the focused remodeling program that is transforming Food Lion's stores. Earlier this year, the company designated Greensboro, N.C. as its next market renewal project in 2005, following the success of projects in Raleigh and Charlotte, N.C. Food Lion stores.

Delhaize's 2004 sales were affected by the acquisition of 43 Harvey's supermarkets consolidated from Oct. 26, 2003; acquisition of 19 Victory supermarkets consolidated from Nov. 26, 2004; and closing of 34 Kash n' Karry stores in the first quarter of the year.

Delhaize attributed its organic sales growth in 2004 to good sales momentum at Food Lion and Kash n' Karry, and continued strong sales at Hannaford; and continued sales growth of 5.5 percent at Delhaize Belgium, including 2.2 percent comparable store sales growth.

In 2004, the contribution of the U.S. operations to the sales of Delhaize Group was $15.8 billion (EUR 12.7 billion), an increase of 1.9 percent over 2003.

This year, Delhaize Group expects to open 50 new supermarkets in the U.S., including 11 relocated stores. The company plans to close 17 stores in the U.S., resulting in a net increase of 22 stores to a total number at the end of 2005 of 1,545 stores. Approximately 181 U.S. stores will be remodeled or expanded in 2005.

In 2005, all Kash n' Karry operations in the markets of Naples/Ft.Myers and Sarasota/Bradenton will be relaunched under the Sweetbay Supermarket brand.

In addition to the remodeling of 181 stores, 12 Food Lion stores will be converted in 2005 to Harvey's stores, bringing the expected number of Harvey's units at the end of the year to 68. Delhaize said these conversions will its presence Harvey's its primary market area by tapping into the strength of that local brand.
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