Delhaize Names US Boss; Changes in Store for Belgium

Kevin Holt as has been hired as the new chief executive officer for Delhaize America, which operates 1,358 food stores under the Food Lion, Bottom Dollar and Hannaford banners. The former president of retail operations at Minneapolis, Minnesota-headquartered SuperValu will also become a member of the Delhaize Group executive committee. He will assume both positions on July 7.

“I am very pleased to have Kevin join our team,” said Frans Muller, president and ceo of the Brussels, Belgium-headquartered Delhaize Group. “Kevin brings both deep industry experience as well as a comprehensive customer orientation that will help our US operations continue to implement existing strategy and build on the strong momentum of recent quarters.”

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The Delhaize Group operates 3,520 stores, employing approximately160,000 people in eight countries. In 2013 it rang up €20.9 billion ($28.0 billion) in sales and realized €179 million ($237 million) in net profit. Its network in Belgium, which in 2013 generated €5.1 billion in receipts and claimed a national market share of 25.5%, encompasses 854 stores and supermarkets doing business under the Delhaize, AD Delhaize, Proxy Delhaize, Shop ‘n Go, Tom&Co and Red Market banners.

However, as market share and profits have been declining at Belgian operations in recent years, on June 11 Delhaize Belgium announced a major transformation plan that could result in the loss of thousands of jobs, though it said “forced lay-offs will be avoided as much as possible.”

According to an announcement from headquarters, Delhaize Belgium’s growing structural cost gap related to salary [ranging from 15% to more than 30%] and working conditions in company-operated units, the economic environment and rapidly growing competition in recent years has put it under increasing pressure and could jeopardize financial health down the road.

Thus, in addition to streamlining operations, the Belgian unit intends to accelerate implementation of its commercial strategy through an additional investment of €450 million during the 2015-17 period to enhance personnel development, training, logistics, healthy and quality products assortments, competitive pricing and e-commerce.

To enable this investment, measures will have to be taken that could impact the jobs of 2,500 employees in the coming three years, including the closure of 14 company-run stores at various locations throughout the country.

In order to reduce the growing structural cost gap related to salary and working conditions and to generate funds for the necessary investments, Delhaize Belgium is also considering measures to improve the efficiency and lower the costs of its company-operated activities. These measures include further optimization of the store organization and back-office processes and an adjustment of the salary and working conditions of all employees to better align with the pay scale of  competitors.

“We fully recognize the social and emotional impact these measures have on our employees and their families. We are nevertheless convinced that the identified steps are absolutely necessary to guarantee the future of Delhaize Belgium. We have been present on the Belgian market for almost 150 years, and are determined to remain so for the long term,” said Denis Knoops, chief executive officer of Delhaize Belgium.