As reported in Belgium-based newspaper L’Echo, Louis Delhaize has announced its FY2018 results, revealing a net loss of €929m (US$1.04 bn). The retailer said its operating income also declined from +€204m (US$228m) in 2017 to a loss of €833m (US$932m) in 2018. Louis Delhaize’s revenues remained stable at €8.7bn (US$9.7bn).
Loss due to goodwill, restructuring and dispute settlements
The retailer attributes its loss to the impairment of goodwill at Cora France, restructuring costs at supermarkets Cora and Match in France and dispute settlement costs in Romania. Louis Delhaize commented, “Economic and financial uncertainties have continued to weigh on consumption, especially on the non-food sector”.
Belgium also sees decrease in sales
In Belgium, Louis Delhaize also saw a significant sales decrease in 2018. This, Louis Delhaize said, was due to “sluggish consumption” supported by a “competitive environment”.
Its loss at Match increased from -€13.1m (-US$14.7m) to -€14.2m (-US$15.9m), while the position improved slightly at Cora, where the loss was reduced from -€19.4m (-US$21.7m) to -€17.8m (-US$19.9m). CEO of Cora Belgium-Luxembourg, Olivier Haller, said there would be no restructuring of Cora hypermarkets as he expects the chain to recover by 2021.
Refocusing operations in France
In a bid to turnaround operations in France, Louis Delhaize has opened its first day by day corner in its Cora Ermont hypermarket, reports Olivier Dauvers. Day by day is a packaging free retailer committed to reducing waste. Most food products are sold in jars or boxes for self-service, encouraging shoppers to only purchase the quantity they need. The reallocation of selling space to day by day will provide Louis Delhaize with new opportunities for it to drive traffic to its stores.
Other European retailers have increased their focus on reallocating hypermarket space away from challenging categories, such as consumer electronics and appliances. This has seen Italy-based Finiper introduce Unieuro shop-in-shops while Carrefour trials Darty corners in France and Media Markt corners in Poland.
The disruption of retailing and the emergence of new competitors in growth categories will continue to put existing business models under pressure and ask questions of how mainstream retailers will look to stay competitive.