Delhaize cuts 5,000 jobs after Q4 sales shortfall
BRUSSELS (Reuters) - Belgian supermarket group Delhaize DELB.BR plans to cut 5,000 jobs after fourth-quarter sales fell just short of expectations in its key United States and Belgium markets, due to the weak consumer sentiment and price competition.
Delhaize, which makes about 65 percent of its revenue in the United States, said on Thursday it would cut close 113 underperforming stores there and a further 20 convenience stores and supermarkets in Bulgaria, Serbia and Bosnia & Herzegovina.
Delhaize America, which has more than 1,600 stores in 16 states in the eastern United States, also operates under the banners Bottom Dollar Food, Harveys, Hannaford Supermarkets, Reid's and Sweetbay.
All affected stores will close within 30 days and store conversions will begin immediately, the company said.
The company said that fourth-quarter revenue rose by 7.0 percent at identical exchange rates to 5.64 billion euros ($7.16 billion), below the average 5.68 billion euros expected in a Reuters poll of 11 brokers.
Excluding the acquisition of Serbian retailer Delta Maxi, the rise would have been 1.5 percent.
Delhaize said that comparable store sales 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 like-for-like 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 Chief Executive Pierre-Olivier Beckers said in a statement.
Brokers had on average expected comparable U.S. store sales to rise by 1.4 percent and in Belgium decline by 1.0 percent.
Delhaize said in November that conditions were becoming steadily tougher as consumers would not accept inflation-linked price hikes and traded down to cheaper products. ($1=0.788 euros)
(Reporting By Philip Blenkinsop; EDiting by Mike Nesbit)
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