"Our long-term objective is to
transform ourselves into a "Global
best-in-class" food retailer."
DELHAIZE GROUP ANNUAL REPORT '11 5
Pierre-Olivier, in your time as CEO of
Delhaize, was 2011 the most challenging?
Pierre-Olivier Beckers: It is always difficult to
create such a ranking and not all markets faced
the same reality last year. Having said that, 2011
was indeed very challenging, given the uncer
tainty surrounding the euro, consumption, infla
tion and concerns with respect to the banking
system. But even in these difficult circumstances,
we feel like we made real progress this year in
terms of supporting our longer term obiectives.
You announced the New Game Plan in
2009. What is the status of this plan?
POB: When establishing a strategic framework
one should look at the long-term and try to build
a foundation from which one can build sustain
able, long-term success. We feel that the New
Game Plan is the right framework for where we
are today and fits our longer term obiective of
transforming ourselves into a "best-in-class"
global food retailer. With the strategy as our
guide, we have made a number of concrete
steps and taken some clear decisions in order to
build upon that foundation and ultimately deliver
shareholder value. We definitely have more work
to do but I am very encouraged by our progress
to date and it has been gratifying to see our
associates get behind the initiatives and to see
the customers respond in the way they have.
You previously described uncertainty as an
important element of 2011. Uncertainty is
often a result of change.
POB: I would put it differently. A key element to
success is the ability to respond to uncertainties
or environmental changes. Today customers are
changing. Really the genesis of the brand repo
sitioning work at Food Lion as well as the portfo
lio optimization work was our seeking to adapt
to changes in both the consumer and the overall
environment. What do I mean by that? Consum
ers are under pressure to deal with the cur
rent difficult economic environment and many
uncertainties. They are focused on price but
they have also developed what is called "AND
AND" behavior, meaning they want price AND
quality as an example. To meet these demands
and improve our perception with consumers we
undertook the brand repositioning work at Food
Lion. We focused on price but also improved the
shopping experience and emphasized produce,
which is often seen as a barometer for the qual
ity of a store. The response thus far has been
positive and in fact will lead us to accelerate the
roll out of the brand repositioning to another
600-700 Food Lion stores in 2012 with the work
being completed by early 2013.
We will also continue to work on price in all our
operations. In order to meet customer demands,
we will invest a lot of time and effort in further
developing private brand assortments, sustain
able products and in the development of con
venience through the use of technology.
The portfolio optimization announced at the
beginning of the year was also a response
to change. It was a tough decision to close
146 stores in 2012 or 4.3% of our total store port
folio but it was the right one in terms of share
holder value and in fact it will allow us to focus
and invest in our most profitable stores.
As you said, your customers are changing
in terms of habits, preferences and
demands. Technology is playing a key role
here in responding to these changes.
POB: That's right. Multi-channel is no longer a
prospect for retail, some future trend. It is very
real and gaining ground in terms of the way
customers view their choices and price. We
have to think along with them, or even better, be
one step ahead of them.
Delhaize has a history of being a pioneer in food
retail with respect to the development and imple
mentation of new technologies in our stores. For
example, in Belgium, Delhaize Direct established
an important platform for customers to order
online and to collect their groceries at a pick-up
point in a Delhaize store. Based on the success
of this concept we will seek to further roll out Del-
haize Direct in Belgium. We are implementing
such technology also in the U.S. where we have
introduced the Delhaize Direct concept at Han-
naford and early results are encouraging.
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