Belgian retailer Delhaize said today (5 May) it expects its US operations to be “much more nimble” in the months ahead after seeing its sales hit by falling food prices.
Speaking on Delhaize’s first-quarter results conference call today (5 May), president and CEO Pierre-Olivier Beckers said the firm is “confident” of improved volumes in the country as it rolls out its low-cost supermarket model, Bottom Dollar.
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For the three-month period to the end of March, net profit increased 2.6% to reach EUR130m (US$169m).
However, operating profit dropped 2.7% to EUR241m, due to the weakening of the US dollar against the euro. Revenues fell 2.3% to EUR4.97bn.
In the US, revenues from operations decreased by 0.4% to $4.7bn.
However, Beckers told analysts: “In 2010, the US will be a much more nimble organisation, we are confident significant cost savings will be delivered over the next few years.
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By GlobalData“We are very excited about Bottom Dollar and the potential this new format has. We have not given any geographies for the stores as we would prefer not to give our competitors information,” he added.
Retailers across the US are looking at price as a key weapon in their competitive battle and Beckers indicated that the retailer was facing fierce competition in Florida.
Beckers said Florida was impacted by the financial crisis more than any other state in the US but he said it is remains “confident” about its business there.
“We are very confident about our business there, it remains challenging, consumers are challenged, but the first-quarter was absolutely challenged and our plan is to break even for the remainder of the year,” Beckers told analysts.
He added that the firm was “comfortable” about price reduction it had implemented, bringing it closer to its main competitor in the US.
“We are very comfortable with the price reductions, they are very real and have been done with the announcement of Wal-Mart’s mass price reductions. The reductions are at shelf level and have brought us much closer to Wal-Mart and that is within our strategy,” Beckers said.
