Belgian retailer Delhaize is going to open twenty new stores in Serbia, close seven unprofitable ones and renovate forty others. The optimisation of its retail network will also take place in Bosnia-Herzegovina (closing six stores) and Bulgaria (closing seven).
Reinvestment strategy following poor results
The new strategy follows Delhaize's announcement of disappointing quarterly results last week. In Serbia, the chain will close seven Mini Maxi stores and rebrand forty others as the whole Tempo Express format is to be turned into Maxi stores. Currently Delhaize Serbia employs almost 11,000 people; another 600 new jobs will be created in the 20 opening stores while 100 people will have to be let go as their store closes.
“Closing unprofitable and opening new stores will save the company money, which Delhaize Serbia plans to reinvest in the Serbian market, which will primarily benefit the consumers”, said David Vander Schueren, Delhaize Group Director for Serbia, Bosnia-Herzegovina and Montenegro to Serbian news agency Tanjug.
Delhaize gets applause from Serbian Ministry
Last year, Delhaize acquired the Serbian retail chain Delta Maxi for € 932.5 million, which was good for over 90% of all foreign retail investments in the country, according to state secretary for trade Vladimir Matović. Second on the list of big investors, but by quite a margin, is Slovenian Mercator-S with € 57 million. Along with IDEA, a part of the Croatian Konzum, these two chains have the largest market share in Serbia, according to the Serbian Chamber of Commerce (PKS).
The Trade Ministry officially applauded the Belgian supermarket chain Delhaize for “raising the quality of services with new methodologies, thus assigning the same task to its competitors, which the consumers will benefit from.” Matović also stated that he expected a boom of foreign retail investments in his country, starting with German chain Lidl that is – according to him – already registered in Serbia and looking for locations to open stores in. He hopes that the foreign chains will “improve competitiveness, which will lead to more favourable prices and drop in trade margins.”
Bulgarian plans rather similar
In Bulgaria, Delhaize plans to close five Piccadilly stores, one Piccadilly Express and the only Tempo hypermarket in Bulgaria, in Sofia, by the end of 2012. 99 people will lose their jobs, but employees in Plovdiv can be relocated to other stores.
"Our actions will strengthen our market performance, and will allow us to focus on our strategy of successful and profitable growth," stated Erikjan Lantink, COO of Delhaize Bulgaria. He also pointed out that also in his country, several new stores will be opened.
Delhaize currently employs 2,600 people in 42 stores in Bulgaria, belonging to either the Piccadilly, Piccadilly Express or Tempo format. They came in Belgian possession as they were part of the Delta Maxi chain since 2007.
No details for Bosnian future
Delhaize also plans to close six Bosnian stores, bringing the number down from 44 to 38. The exact breakdown of the Bosnian plans, or any schedule for reinvestment, has not yet been announced. The group operates its Bosnian Maxi, Mini Maxi and Tempo stores since 2011.
Last week, Delhaize said it wants to "optimize its retail network in all world markets where it operates". Biggest victim of the cuts are the American stores, where 5,000 jobs will be cut as 126 shops (including 113 Food Lions) close. Much like in - at least - Bulgaria and Serbia, the saved money will be reinvested in American store openings and rebrandings.