Delhaize Group, the Belgian international food retailer, announced during its Analyst Meeting held in the U.S., plans to further accelerate store openings in its newer operations and achieve Group annual revenue growth of 5 to 7% within three years. Additional cost savings will be generated and used to invest in the many sales building initiatives that will support accelerating growth.
Speaking at the Analyst Meeting, Pierre-Olivier Beckers, President and Chief Executive Officer of Delhaize Group, commented: “Two years into the execution of the New Game Plan, aimed at accelerating revenue and operating profit growth, we are making a lot of progress in a difficult environment. We are strengthening our brands, stepping up price investments at all our operating companies, further developing our formats and generating the means to fund these initiatives through structural changes in the way we operate. We have also completed a strategic acquisition of the Delta Maxi operations in Southeastern Europe, a move that we expect to substantially change the growth profile of our Group. We are confident that our Group will be able to seize the many opportunities that come with the challenging environment we operate in. While we continue to be focused on the disciplined execution of the many projects that are ongoing, we are ready to accelerate our store opening plans.”
Accelerate store openings in our Newer Operations
Delhaize Group’s newer operations, the combination of its new markets (Southeastern Europe and Asia) and new formats (Bottom Dollar Food in the U.S. and Red Market in Europe), have contributed significantly to the Group’s revenue and operating profit growth during the first two years of the New Game Plan. With the recent acquisition of Delta Maxi, the Group has further strengthened its base in countries that provide significant potential for growth.
Additionally, the encouraging results of Bottom Dollar Food in the Philadelphia market support plans for expansion in additional markets that present the same growth profile. This will include hundreds of new Bottom Dollar Food stores over the next five years.
The Group expects to open approximately 450 stores in its high growth newer operations in the three year period 2012-2014 which represents a significant step up from the past years. As a result of this important step up in store openings and the encouraging results in the rest of our network, Delhaize Group expects to generate revenue growth of 5 to 7% annually within three years.
Generate additional gross cost savings to fund sales building initiatives
As of the end of the second quarter of 2011, halfway through the three year period to generate EUR 500 million in annual gross cost savings, Delhaize Group had realized already approximately 60% of this target. Today, Delhaize Group expects to exceed this target, mainly due to increased savings in cost of goods sold, which will enable it to invest more in sales building initiatives should the economic and competitive environment require it do to so.