Tags: Food | Lion | delhaize | jobs

Food Lion Parent Delhaize to Cut 5,000 U.S., Europe Jobs as It Closes Stores

Thursday, 12 Jan 2012 07:16 AM


  Comment  |
   Contact Us  |
|  A   A  
  Copy Shortlink
Delhaize Group SA, the owner of Food Lion supermarkets, plans to cut about 5,000 positions and expects a 2.4 percent drop in revenue as it closes stores in the U.S. and Europe.

Costs related to the closures will hurt earnings by about 205 million euros ($261 million) starting in the first quarter, the Brussels-based company said in a statement today. Closing 146 outlets and converting 64 others will cut the number of shops by about 4.3 percent and initially lower revenue by about 500 million euros, or 2.4 percent, Delhaize said.

“We are disappointed in the fourth-quarter revenues in the U.S. and Belgium,” Chief Executive Officer Pierre-Olivier Beckers said in the statement. “Consumers continued to feel pressured in the fourth quarter due to the macro-economic environment and this led to a reduction in spending. We also encountered an increase in competitive activity.”

Consumers continue to be hurt by high levels of joblessness in the U.S. and Europe. The U.S. unemployment rate, which was 8.5 percent in December, may continue to curb spending in the world’s largest economy, where Delhaize gets most of its revenue.

Delhaize lost 17 percent of market value in the past year compared with a 13 percent decline for the Stoxx Europe 600 Index. The stock rose 2.7 percent to 46.85 euros in Brussels yesterday.

Delhaize expects to record an impairment charge of about 120 million euros in the fourth quarter of 2011, which is related solely to the U.S. operations.

‘Positive Effect’

The store closures and conversions will have an “annual positive effect” on operating profit of 35 million euros to 40 million euros after completion, said Delhaize.

Beckers said Delhaize will improve its “price competitiveness” this year.

The food retailer will close 113 Food Lion, seven Bloom and six Bottom Dollar Food locations in the U.S., it said. The remaining 42 Bloom shops as well as 22 Bottom Dollar Food stores will be turned into Food Lion outlets.

Twenty stores in southeastern Europe will also be closed. Delhaize gets most of its revenue in the U.S., where it got 68 percent of its total 2010 sales of 20.9 billion euros, according to data compiled by Bloomberg.

In its home market of Belgium, the company, in addition to supermarkets, operates a home delivery service and started to offer online shopping, according to its annual report.

Growth Forecast Cut

Belgium’s central bank last month reduced its forecast for economic growth in 2012 to 0.5 percent, in line with the latest prediction by the Organization for Economic Cooperation and Development.

In last year’s fourth quarter, Delhaize’s revenue increased by 7 percent at identical exchange rates and by 7.6 percent at actual rates, the company said in its statement. The “difficult global macro-economic environment” hurt sales performance across the group, it said.

Delhaize ended 2011 with a sales network of 3,408 stores, according to the statement.

© Copyright 2014 Bloomberg News. All rights reserved.

  Comment  |
   Contact Us  |
  Copy Shortlink
Around the Web
Join the Newsmax Community
Please review Community Guidelines before posting a comment.
>> Register to share your comments with the community.
>> Login if you are already a member.
blog comments powered by Disqus
Retype Email:
Zip Code:
Privacy: We never share your email.
Hot Topics
Follow Newsmax
Like us
on Facebook
Follow us
on Twitter
Add us
on Google Plus
Around the Web
Top Stories
You May Also Like

Expert: Use Complex Passwords to Protect Accounts

Tuesday, 02 Sep 2014 13:09 PM

One primary method to protect Internet cloud accounts from hackers is to use "complex" passwords, a cyber security exper . . .

Texas Calls Voter ID Trial Obama Play For Minority Votes

Tuesday, 02 Sep 2014 15:34 PM

The U.S. Justice Department wants Texas back.
A trial that began today in Corpus Christi over the legality of a vot . . .

Apple Says ICloud Not Breached in Celebrity Photo Hack

Tuesday, 02 Sep 2014 15:22 PM

Apple said Tuesday that certain accounts of Hollywood celebrities were compromised via a very targeted attack on its s . . .

Most Commented

Newsmax, Moneynews, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, NewsmaxWorld, NewsmaxHealth, are trademarks of Newsmax Media, Inc.

America's News Page
©  Newsmax Media, Inc.
All Rights Reserved