Delhaize to open 200 new stores trying to boost falling profits

Delhaize to open 200 new stores trying to boost falling profits

In 2012 Belgian supermarket chain Delhaize saw its net profits plummet 77% compared to 2011. In the fourth quarter the group even ended at a small loss, mainly because of lower margins in the US and competition of discounters. Delhaize's cure? Open more new stores.

2012 ends with abysmal quarter

In the past year Delhaize had sales worth of 22.7 billion euro, a rise by 7.7% compared to 2011. Net profits however made a massive drop by 77.8 percent to 105 million euro. In the last quarter the group made a loss of 168 million euro, as its gross margin dropped by 130 points to 24.3%.

 

On the Belgian market company profits dropped by 15.1 percent to 53 million euro, while in America the group had to take a hit of 35.7 percent to 156 million euro. High pricing pressure in the United States and investments in price drops elsewhere are some of the main causes according to the retailer.

 

Revitalise and accelerate

In 2013 Delhaize wants to revitalise in Belgium, especially since the group is expecting the discounters to keep on gaining market share, causing another difficult year for Delhaize. In the United States the position of Food Lion will be fortified at an accelerated pace.

 

In Europe the group would like to improve its market share in Greece, Romania, Serbia and Bulgaria. By opening 200 new stores around the world this year, the group hopes 2013 will be the year of the resurrection.

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