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Kash n' Karry to Restructure; Close 34 Stores

BRUSSELS - Delhaize Group here today said it will restructure its Tampa, Fla.-based Kash n' Karry subsidiary to focus on Florida's western Gold Coast, where it plans to open or remodel 20 stores. However, to redirect the resources to where they will benefit Kash n' Karry most, 34 underperforming stores will be closed or sold in the first quarter of 2004.

The announcement was made as part of the release of Delhaize's fourth-quarter and year-end results. Total sales at the company, which also operates the Food Lion, Hannaford, and J.H. Harvey chains in the United States, were 18.8 billion euros.

Sales at U.S. operations for the year totaled $15.5 billion, an increase of 3.5 percent over 2002. Comparable-store sales increased 0.6 percent. Sales were affected by the acquisition of 43 Harveys stores in November, the closing of 42 stores in the first quarter, and a 53rd sales week.

While sales continued to be strong at Hannaford in 2003, the sales trend at Food Lion and Kash 'n Karry gained momentum throughout the year. All U.S. banners realized positive same-store sales growth in the second half of the year.

Fourth-quarter sales were $4.2 billion, an increase of 13 percent compared with 2002. Comparable-store sales increased 2.9 percent, compared with 1.0 percent in the third quarter.

During the year Delhaize opened 79 new stores in the United States, including three relocations, resulting in an increase of 30 stores, net of 46 store closings. In addition, it expanded and remodeled 94 stores during the year, including 68 Food Lion stores in the Raleigh, N.C. market, the first time Food Lion has undertaken a focused-market remodeling program.

In 2004 Delhaize Group expects to open 58 new supermarkets in the United States, including seven relocations. It plans on closing 45 stores, among them the 34 Kash n' Karry locations, as well as 10 Food Lions that will be converted to Harveys. It expects to close 2004 with a net increase of six stores, to end the year with 1,521 stores.

Additionally, 111 stores will be remodeled or expanded this year. Food Lion's success in Raleigh has prompted it to identify a second, as-yet-unnamed market where stores will have a focused remodeling.
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