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Delhaize Group’s sales and earnings rise in Q1

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The retailer's U.S. comparable-store sales grew 2.6%

Delhaize Group’s sales and earnings rise in Q1
BRUSSELS — Delhaize Group on Wednesday posted a nearly fourfold rise in first quarter profit, as sales increased in each of its major regions of the United States, Belgium and southeastern Europe. For the quarter ended March 31, Delhaize’s net profit was 109 million euros ($123 million), up from 28 million euros a year earlier.

Delhaize operates 3,400 stores in seven countries — Belgium, Greece, Luxembourg, Romania, Serbia, Indonesia and the United States. Nearly one-third of its stores are U.S.-based Food Lions, operating in 10 states. It also owns the Hannaford chain of about 186 supermarkets in Massachusetts, Vermont, New Hampshire, Maine and New York.

Sales at Delhaize’s U.S. stores increased 1.9% to $4.5 billion in the quarter as comparable-store sales rose 2.6%, the company said.

“We have started 2016 with further improving revenue trends,” Frans Muller, president and chief executive officer of Delhaize Group, remarked in a statement. “In the United States, although we continued to see deflation, we are also realizing ongoing solid 3.7% real growth. In Belgium, we reported good comparable-store sales growth of 2.9% and a 50-basis-point improvement in our market share compared to the first quarter of last year. While our sales trend continued to be largely driven by the Affiliated network, we remained focused on improving execution in our integrated stores. Finally, our southeastern European operations reported an outstanding performance. In Greece, our Alfa Beta stores, uniquely positioned, have implemented successful promotional and marketing plans in a grocery market that continues to shrink.”

Muller also commented that the company remains focused this year on completing its merger with Koninklijke Ahold N.V. of the Netherlands. The merger is on track for completion by mid-2016 after gaining approval from shareholders of both companies and clearance from the Belgian Competition Authority, the company said. The deal still needs the OK of U.S. regulators at the Federal Trade Commission.

The tie-up, announced last summer, would create one of the largest supermarket operators in the United States, marrying Delhaize’s Food Lion and Hannaford chains to Stop & Shop and Giant stores owned by Ahold. The combined company will be called Ahold Delhaize and headquartered in the Netherlands.

The merger also would give Ahold Delhaize greater buying clout. Executives with the retailers said they expect 500 million euros ($560 million) in annual cost savings from combining their supplier networks and advertising and promotions, as well as from leveraging scale in their in-house brands.


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