Belgian food retailer Delhaize has reported strong sales growth for 2005, with net sales and other revenue of EUR28.6bn (US$34.5bn), up by 4.2% on 2004 levels.
Delhaize’s Belgian concerns produced revenues of EUR4bn in 2005, an increase of 3.5%, while the company’s 1,537 US supermarkets generated net sales of US$16.6bn (EUR13.3 bn), an increase of 4.4% over 2004.
Delhaize operates 2,636 retail stores under more than 20 names in the US, Europe and Asia. During 2005, the company acquired 43 Cash Fresh supermarkets in Belgium, 11 Delvita stores in Slovakia and 19 Victory supermarkets in the US.
These acquisitions have had a considerable impact on Delhaize’s growth, as organic sales growth amounted to only 2.2% for the year. Organic sales growth was driven by good sales momentum at Food Lion and continued strong sales at Hannaford, resulting in a comparable store sales growth of 1.1% at the US operations. However, Belgian sales, driven down by the general reduction in consumer spending and highly competitive environment, declined by –1.1%.
In the fourth quarter of 2005, the comparatively strong US dollar helped push up net sales and other revenues by 12.2% to EUR5bn. At identical exchange rates, net sales would have grown by 5.4%.
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“Our main satisfaction for the fiscal year 2005 has been an improving sales trend during the year, with the strongest sales dynamics in the fourth quarter. We have been particularly pleased with the sales upturn at Food Lion, our largest US banner, in the second half of the year. In 2005, Delhaize Group succeeded for the third consecutive year to accelerate its underlying sales momentum”, said Pierre-Olivier Beckers, president and CEO of Delhaize Group.
In 2006, Delhaize plans to increase its sales network by 96 stores and anticipates capital expenditures (excluding finance leases) of approximately EUR770m