Delhaize delivers ‘solid’ Q2 results

Date : 08 August 2013

Belgium-based Delhaize has announced second quarter results saying that it had enjoyed revenue growth of 1.7% at identical exchange rates, with comparable sales rising by 1.1% in the US and 0.8% in its home market.

Retailer enjoying strong organic revenue growth

Delhaize said that at a group level it had seen organic revenue rise by 1.9%, with the US being particularly strong. At its operations in the US, Delhaize said that revenue growth of 0.4% – excluding revenues from the Sweetbay, Harveys and Reid´s banners, which it is in the process of divesting – had been impacted by a negative calendar impact of 0.8%. The retailer highlighted how it was continuing to ‘experience low retail inflation’ which had led to positive volume growth at both Food Lion and Hannaford.

Outside of the US, Delhaize said that it had seen revenues grow by 2.9% in its home market, driven by inflation, and a 0.8% rise in comparable store sales growth. Revenues in the retailer’s Southeastern Europe division rose by 4.8% at identical exchange rates, aided by growth in Greece, and ‘further positive transaction growth’. Elsewhere in the region Delhaize said that Maxi had ‘experienced high retail inflation and negative real growth in line with the market’, while in Romania comparable sales growth had ‘picked up in the second quarter’.

Remodelled stores and price investment drive growth

Commenting on the retailer’s performance, Delhaize’s president and chief executive, Pierre-Olivier Beckers, said it had ‘…delivered solid results for the second quarter. At Food Lion, 178 additional stores were repositioned as part of Phase 4, bringing the total of repositioned stores to almost 80% of the network. At Hannaford, we have implemented our targeted price investments during the second quarter. In Belgium, we are pleased to report market share gains of 35 basis points, mainly resulting from our remodelled stores and network expansion.”

Outlook remains cautious

Delhaize’s management said it remained cautious about the second half of the year as it continued to invest in phases 4 and 5 of its Food Lion remodelling programme, with the latter likely to see 200 stores completed, in the US and in price at its Hannaford and Food Lion banners. The retailer also said it was aiming to open 10 Bottom Dollar stores and would be looking to evolve its Food Lion offer to raise the average basket and proportion of fresh products sold. The cautious note was backed by continued negative shopper sentiment in its home market of Belgium, which were felt likely to limit volume growth in the short term.

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