500
GROUP
FUEL FOR
GROWTH
What were the most important
accomplishments in 2011?
6 DELHAIZE GROUP ANNUAL REPORT '11
Target of EUR
We were also one of the first food retailers to
develop an application for iPhone and Android
devices. So I think we have a track record of
success and innovation in this area. Having said
that, one of our goals for 2012 is to develop a
robust digital strategy that will benefit our cus
tomers and be responsive to their changing
needs and habits while at the same time ben
efit the Group by delivering incremental revenue
and improving our operational efficiency.
Improving efficiency is an important pillar
in the Delhaize Group strategy.
POB: As you know, we announced a very ambi
tious gross annual cost savings target of approxi
mately EUR 500 million to be achieved by the end
of 2012. We have been very pleased with those
efforts and a lot of the credit goes to the associ
ates tasked with implementing these measures.
We are confident that we will achieve our targets
and that the savings will provide further fuel for
growth. And of course we will continue to look
for new savings, both in the way we operate our
business and in the way we source our products.
By doing so, we are generating the necessary
extra fuel to invest in sales building initiatives
and thus in future growth. Being more efficient is
an important lever for cost savings. This was the
rationale for establishing the Delhaize America
structure and we are clearly benefiting from the
initiatives taken. For instance, common procure
ment is starting to deliver the results we had
anticipated, as are the computer assisted order
ing systems and the integrated IT platforms.
million gross annual
cost savings by end
of 2012
"We are confident that
we will achieve our
targets and that the
savings will provide
further fuel for growth.
And of course we will
continue to look for
new savings. Both in
the way we operate
our business and in
the way we source our
products."
POB: I could think of quite a num
ber of accomplishments but will focus on
four. As I mentioned above, we are on track to
deliver and in fact to exceed the EUR 500 mil
lion target in gross annual cost savings. We
acquired Delta Maxi, the second largest trans
action in the Company's history. This transac
tion establishes Delhaize Group as a strong
regional player in Southeastern Europe. We
also undertook an aggressive repositioning of
Food Lion which is succesful so far. Finally, we
continued the successful roll-out of our Bottom
Dollar Food concept in Philadelphia and have
just launched the format in the Pittsburgh mar
ket. Although in a challenging year, Delhaize
Group succeeded in growing revenues by 4.6%
at identical exchange rates and came out with
a top line number of EUR 21.1 billion. And with
downgrades occurring everywhere you look, I
would point out that we maintained our invest
ment grade status and were able to complete a
very successful bond offering in Belgium and the
Grand Duchy of Luxembourg.
How do you feel about the Group's growth
prospects?
POB: We feel that we have a portfolio of assets
that is well positioned to deliver growth. In fact,
we recently announced our plan to deliver top
line growth of 5% to 7% annually within 3 years
from now. By the way, as the New Game Plan
highlights, we are not going to grow just for the
sake of it but rather we will seek to achieve prof
itable growth through increasing our scale and
competitiveness and our market share. And
indeed we have some truly great opportunities
in all shapes and sizes.
For example, consider our business in Indo
nesia. With Super Indo we are well placed to
tap the growth potential of this exciting South
east Asian market with its 240 million inhabit
ants and economic growth rates that Western
countries can only dream about. I truly believe
Super Indo has the potential to become a sig
nificant contributor to the Group. Our Romanian
business continues to impress as well as does
Alfa Beta in spite of the worst economic crisis in
Greek history.
While the U.S. is, generally speaking, a mature
market and might appear to offer less growth
