Delhaize America sees slight Q1 sales gain
SALISBURY, N.C. — First-quarter revenue for Delhaize America, the U.S. sector of the Delhaize Group, which includes such supermarket banners as Food Lion and Bottom Dollar, experienced a 0.1% increase to nearly $4.7 billion, the company reported.
Comparable-store sales for the quarter ended March 31 dropped by 0.3%, but marked a continued trend improvement for the third consecutive quarter. Operating profit for the quarter decreased by 13% to $216 million, which was attributed to an increase in selling; general and administrative expenses as a result of new stores contribution; more store remodels; higher repair and maintenance expenses; fees for increased electronic payments in the United States; and costs related to specific projects, such as the common procurement initiative and expenses related to strategic sales building initiatives at Food Lion and Bottom Dollar Food. These expenses partly were offset by continued cost savings.
Commenting on the financial results, Delhaize Group president and CEO Pierre-Olivier Beckers said that the company is on track to achieving its goals and that its U.S. operations would relaunch the Food Lion banner in the Raleigh, N.C., and Chattanooga, Tenn., markets.
As part of the relaunch, the banner also will be involved in several sales building initiatives, such operational enhancements as staffing and process improvements, product handling and replenishment improvements in the produce department, increased SKU counts, improved price positioning, and an easy and convenient shopping experience. Over the next months, Food Lion closely will monitor the success of these initiatives in order to ensure that both markets will provide valuable learnings for the upcoming rollout in the rest of the network to begin in 2012, Delhaize said.
“Today, we have relaunched around 200 Food Lion stores in the Raleigh and Chattanooga markets that will serve as phase one of the fundamental repositioning work focused on the brand elements of price, assortment and shopping experience," Beckers said of the company’s U.S. operations. "Helped by what we learn from this first phase, we will roll out the repositioning work to the large majority of the Food Lion network by the end of 2012.”
By the end of the quarter, Delhaize America operated 1,635 supermarkets, eight locations above the year-ago period.
Delhaize America recently appointed Don Hodge as its CEO.
Walgreens comps rise for April
DEERFIELD, Ill. — Sales for Walgreens during the month of April edged up 5.5%, thanks to a boost in both front-end and pharmacy sectors.
The drug store chain said that total front-end sales experienced a 9.4% boost, while comparable front-end sales benefited from the later Easter holiday with a 6.5% increase.
On the pharmacy front, sales increased 3.5%, while comparable-pharmacy sales increased 1.8%, accounting for 64.4% of total sales for the month. Prescriptions filled at comparable stores increased 2.3% in April. Calendar day shifts, however, negatively impacted prescriptions filled in comparable stores by 1.9 percentage points, Walgreens reported, adding that the recent over-the-counter switch of allergy drug Allegra negatively impacted prescriptions filled by 0.3 percentage point.
Customer traffic in comparable stores increased 2.3%, while basket size increased 4.2%.
April sales in overall comparable stores increased 3.4% for the chain, which was negatively impacted by 1.2 percentage points due to the calendar day shift. On a combined basis, comparable-store sales for the March/April period rose 3.3%, marking a 6.7% rise from the same two months in 2010. Additionally, comparable-store front-end sales for the combined March/April period increased by 4.1%, while customer traffic in comparable stores increased 1.6% and basket size increased 2.5%.
Duane Reade stores are not included in any comparable-store results, Walgreens noted.
Walgreens noted that its overall April sales rose to nearly $6 billion for the month, compared with about $5.7 billion in April 2010, and attributed a 0.7 percentage point contribution from Duane Reade.
Forrester survey: 91% of retailers have mobile strategy in place or in development
Washington, D.C. — More and more retailers are experimenting with mobile and social initiatives. According to “The State Of Retailing Online 2011: Marketing, Social, and Mobile” report conducted by Forrester Research. for Shop.org, 91% percent of retailers currently have a mobile strategy in place or in development (up from 74% a year ago), and 72% say they will increase their spending on social networks this year over last.
However, the overall amount of mobile traffic and revenue has not increased dramatically, suggesting that investment levels in site optimization may still be inadequate. For example, 48% of retailers report having a mobile-optimized website; 35% have deployed an iPhone app; and 15% offer an Android app and an iPad app, respectively. Challenges for retailers include differentiating the consumer experience on a tablet versus a smartphone and figuring out features and functionality in dueling app/mobile Web ecosystems.
Compared with past years, social networks surfaced higher as an investment area among retailers. Social networks ranked fourth on the list of successful customer acquisition sources, up significantly from last year. Yet the ROI associated with social is muddy: 62% of retailers said the returns on social marketing strategies are unclear, and nearly the same percentage said the primary ROI from social marketing is listening to — and gaining a better understanding of — customers.
“The data indicates that significant investments in social and mobile tactics will be in place this year,” said Sucharita Mulpuru, VP principal analyst, Forrester Research. “Retail executives should have modest expectations for the benefits of social commerce.”
With regard to mobile, Mulpuru said retailers should be working to increasingly integrate features and functionality into the physical store experience.
“While consumers may not be extensively exploring product information yet, basic store information, transparent pricing, and easy checkout capabilities are likely to be the most pressing opportunities for most sites in the near term,” she said.