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Venture

Robert Trigaux

Sweetbay Supermarket parent, Delhaize of Belgium, slashing 5,000 jobs after weak sales

12

January

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Sweetbay Supermarket's Mike Vail was a key player in the leadership team that transformed Kash n' Karry Food Stores into a more upscale Sweetbay Supermarket for its Belgian owners. More than eight years later as Sweetbay president, he's guiding the Tampa Bay area chain through an extended economic downturn and aggressive expansion by rivals Publix, Walmart, and less pricey newcomers Aldi and Save-A-Lot. All this at a time when consumers balk at paying rising food prices. Read more from this 2011 Tampa Bay Times story here. (Photo: Jim Damaske, Tampa Bay Times)

 

delhaize-logo.jpgWake up and good morning. Delhaize, the Belgian parent of the Tampa Bay area Sweetbay Supermarket chain and other grocery store brands shocked the business world saying it plans to cut 5,000 jobs after fourth-quarter sales fell short of expectations in its key United States and Belgium markets, due to the weak consumer sentiment and price competition. Here's more overview from Bloomberg News.

I can't say I am too surprised. When Sweetbay emerged after an overhaul and rebranding of this area's tired Kash n' Karry chain, I was delighted and the stores looked promising. Lately, they have faded. I don't see many customers when I am there. There are few cashiers. Sweetbay's choices are sometimes limited and their pricing strategy -- presumably intended to be cheaper overall than No. 1 market leader Publix, for example -- is not sharp enough to feel I've saved much if any money on a weekly food shopping. For value shoppers, that's troubling.

There's no word yet on what these big corporate cuts may mean for the 105-store Sweetbay chain. But another Delhaize food chain many may know -- Food Lion -- just announced that all Food Lion stores in the greater Jacksonville area (that's a dozen stores just in Jacksonville) are closing within 30 days. About 900 Florida employees of the chain will be affected with about 450 of those coming from Jacksonville locations. Stores in Clay, St. Johns, Nassau, Baker and Alachua counties are also closing.

Delhaize makes about 65 percent of its revenue in the United States. On Thursday it said would cut close 113 underperforming stores there and a further 20 convenience stores and supermarkets in Bulgaria, Serbia and Bosnia & Herzegovina. Read more from the Jacksonville Times Union about the Food Lion hits here.

Delhaize America has more than 1,600 stores in 16 states in the eastern United States. In addition to Sweetbay and Food Lion, the company operates stores known as Bottom Dollar Food, Harveys, Hannaford Supermarkets and Reid's.

Delhaize said that comparable store sales (stores open at least one year) fell by 0.4 percent in the United States in the final three months of 2011, hit by inflation and weak consumer confidence. Belgian stores registered a similar decline of 1.5 percent."While we grew our revenues for the full year, we are disappointed in the fourth quarter revenues in the U.S. and Belgium," Delhaize CEO Pierre-Olivier Beckers said in a statement. In November, Delhaize said conditions were becoming steadily tougher as consumers would not accept inflation-linked price hikes and traded down to cheaper products.

All in all, not a good sign for Tampa Bay area food shoppers. No. 1 Publix and No. 2 Walmart/Sam's Club continue to be strong. Struggling Winn-Dixie was just bought by Bi-Lo. It's an ultra-competitive market.

-- Robert Trigaux, Business Columnist, Tampa Bay Times

 

[Last modified: Thursday, January 12, 2012 7:29am]

    

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