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Delhaize to Cut 5,000 Jobs in U.S., Europe as It Closes Stores
January 11, 2012, 11:36 PM EST

Jan. 12 (Bloomberg) -- Delhaize Group SA, the owner of Food Lion supermarkets, plans to cut about 5,000 positions and expects a 2.4 percent drop in revenue as it closes stores in the U.S. and Europe.

Costs related to the closures will hurt earnings by about 205 million euros starting in the first quarter, the Brussels- based company said in a statement today. Closing 146 outlets and converting 64 others will cut the number of shops by about 4.3 percent and initially lower revenue by about 500 million euros ($636 million), or 2.4 percent, Delhaize said.

“We are disappointed in the fourth-quarter revenues in the U.S. and Belgium,” Chief Executive Officer Pierre-Olivier Beckers said in the statement. “Consumers continued to feel pressured in the fourth quarter due to the macro-economic environment and this led to a reduction in spending. We also encountered an increase in competitive activity.”

The store closures and jobs cuts at Delhaize come as consumers continue to be hurt by high levels of joblessness in the U.S. and Europe. The U.S. unemployment rate, which was 8.5 percent in December, has curbed spending in the world’s largest economy.

Delhaize lost 17 percent of market value in the past year compared with a 13 percent decline for the Stoxx Europe 600 Index. The stock rose 2.7 percent to 46.85 euros in Brussels yesterday.

Delhaize expects to record an impairment charge of about 120 million euros in the fourth quarter of 2011, which is related solely to the U.S. operations.

The store closures and conversions will have an “annual positive effect” on operating profit of 35 million euros to 40 million euros after completion, said Delhaize.

Beckers said Delhaize will improve its “price competitiveness” this year.

The food retailer will close 113 Food Lion, seven Bloom and six Bottom Dollar Food locations in the U.S., it said. The remaining 42 Bloom shops as well as 22 Bottom Dollar Food stores will be turned into Food Lion outlets.

Twenty stores in southeastern Europe will also be closed.

PDF of all closing locations here- http://d1pmybhtyfsbgv.cloudfront.net/Assets/Docs/corporate/Delhaize_America_Store_Closings.v-2-1-2948-0.pdf

Here's part of the story from Jacksonville.com site-

"Food Lion is exiting the state of Florida but it will continue to operate there under the Harveys banner," said Christy Phillips-Brown, a Food Lion spokeswoman.

Food Lion LLC is a subsidiary of Brussels-based Delhaize Group, which described the closures as “key strategic actions to strengthen its U.S. portfolio.”

It said the 113 Food Lions being closed were “under-performing” stores, primarily in markets in which the company has the least store density.

The employees of the Food Lion on Blackford Way in St. Augustine were told the devastating news after being called into mandatory meeting at 9 p.m.

“We were totally blind-sided.” said Jason Smith, who’s worked at the store about a year-and-a half. “Nobody had any clue today that we’d all be out of a job in 30 days or less. It was a shock to everyone.”

Smith, who worked as a cashier and stocker, was among about 30 employees at the store. They were told that they would have an opportunity to relocate to one of the stores remaining open, he said.

The company said there would be some severance pay for those who don’t relocate, Smith said.

Their store has only been open for about 2 1/2 years. It and a restaurant were the only businesses open in the shopping center, he said.

“Our store was pretty slow,” Smith said.

Smith said he will start looking for another job immediately, but doesn't know how long it might take to find one because of the sluggish economy.

Founded as Food Town in 1957, Food Lion is one of the largest supermarket companies in the United States.

Food Lion LLC operates about 1,300 supermarkets, either directly or through affiliated entities, under the names of Food Lion, Bloom, Bottom Dollar, Harveys and Reid’s.

“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 Ron Hodge, chief executive officer of Delhaize America.

“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,” Hodge said.

The company is retiring the Bloom banner. It will convert 64 Bloom and Bottom Dollar Food stores in Maryland, North Carolina and Virginia to Food Lion stores. The company will close seven under-performing Bloom stores and six Bottom Dollar Food in overlapping Food Lion markets.

The company also will discontinue operations of its distribution center located in Clinton, Tenn., and accelerate the roll out of the Food Lion brand strategy in an additional 600 to 700 stores.

Read more at Jacksonville.com: http://jacksonville.com/news/florida/2012-01-11/story/food-lion-closing-all-first-coast-stores#ixzz1jDdAgJLb