Delhaize to focus on value grocery format
By Christine Blank, SeafoodSource contributing editor
24 January, 2012
Delhaize America’s closing of Food Lion and Bloom stores and re-focusing on its Bottom Dollar value grocery brand is a sign of the strength of value formats in the U.S., according to a retail consultant.
Salisbury, N.C.–based Delhaize America, a division of Delhaize in Brussels, Belgium, announced last week that it was closing 113 underperforming Food Lion stores and retiring the Bloom banner. While Delhaize is also closing six underperforming Bottom Dollar stores and converting several Bottom Dollar locations to Food Lion stores, the retail company is opening approximately 25 Bottom Dollar stores by the end of the year. In addition, Delhaize has “aggressive growth plans” – several hundred stores in the next five years - for Bottom Dollar, according to a statement from the company.
Delhaize is focusing on the value grocery format that has proven to be profitable for Aldi, Save a Lot, Wakefern’s PriceRite format, and others, said Jim Hertel, managing partner of retail consultancy Willard Bishop.
“[Grocery operators] are either going to be at the top end or the bottom end of the market and there is probably more action at the bottom end. The top 10 or 20 percent of the population is the Whole Foods Market – type shopper and there is going to be a greater number shopping for extreme value at the bottom end: at least a 3:1 or 4:1 ratio in the short term,” Hertel said.
Going forward, Bottom Dollar will operate smaller format stores of about 18,000 square feet, which have proven to be more successful for the company, according to a Delhaize statement. “Customers have been very receptive to our discount-grocer model, which includes a smaller format, the most popular national brands, a wide selection of private brand products, and fresh produce and quality meats at unbelievably low prices,” said Meg Ham, president of Bottom Dollar Food.
Bottom Dollar stores feature a selection of seafood items, including a recently advertised special: frozen 16-ounce packages of Ocean Eclipse pink salmon filets for USD 4.97 per package.
24 January, 2012