Delhaize, the Belgian supermarket transnational that owns Food Lion, Bottom Dollar, Bloom and other brands, said late Wednesday that it plans to close 113 underperforming Food Lion stores in the U.S.
No Food Lions in Charlotte are on the chopping block, but a Food Lion at 825 Crossroad Plaza in Fort Mill will be closed. In all, the Food Lion closures represent about 10 percent of the Salisbury-based chain's total store count.
Also, six Bottom Dollar grocery stores, including the one in Mooresville, will be closed. Another 22 Bottom Dollars in Maryland, Virginia and North Carolina will be converted to Food Lions. The company did say it plans to add hundreds of Bottom Dollar stores in the coming years, as consumers look to deep discount store formats for savings.
The 42 remaining Bloom stores will be converted into Food Lions and seven will be closed, ending an experiment with a new supermarket brand that began in North Carolina. The company already converted local Blooms into Food Lion stores months ago. At the time, Delhaize said it wanted to focus on growing the Bloom banner around Washington, D.C.
Delhaize America is closing a total of 126 stores across all of its brands, and 4,900 workers will lose their jobs. The store closures will be complete within 30 days, the company said.
"Today’s actions will continue to solidify our U.S. operations and enable our company to focus on our successful brand strategy repositioning at Food Lion and the expansion of Bottom Dollar Food in new markets,” said Delhaize America CEO Ron Hodge, in a statement. “While these were difficult decisions given the impact on our associates, customers and communities, we believe these actions will enable us to better serve our customers in our markets with high density, while positioning the company for future growth.”
The move represents a complete pull-out from Florida for Salisbury-based Food Lion; the retailer will no longer operate any stores in the state. Delhaize is also closing a distribution center in Tennessee.
There will be 1,127 Food Lions once the closings and store conversions are complete. Food Lion said the move will allow the company to focus one areas where Food Lion already has a lot of stores or a large share of the market.
A complete list of stores affected is available here. You can read the company's press release here.
Delhaize also reported its 2011 earnings. Revenue from all U.S. stores was up a modest 2.2 percent, reaching $19.2 billion. Sales at stores open a year or more, an important measure of a retailer's health, grew only 0.7 percent in the U.S. for the full year. In the fourth quarter, however, sales at stores in the U.S. open a year or more fell by 0.4 percent.
The store closings will reduce Delhaize's total number of stores by 4.3 percent. Interestingly, Delhaize said it expects the closings will cost it $650 million in revenues, but increase operating profit by 35 to 40 million euros (the Belgian company records its profits in the European currency).