Delhaize Group reports Q2 sales drop of 3.9% to €5.1B, as Belgian grocery retailer fails to buffer margins with anticipated cost savings in U.S. market
August 5, 2011
– Delhaize Group reported a second-quarter sales drop of 3.9% to 5.1 billion euros, as the Belgian grocery retailer failed to buffer margins with anticipated cost savings in the U.S. market, The Wall Street Journal reported August 5.
Second quarter net profits grew 2.6% due to reduced taxes and debt costs, while a weak dollar was blamed for the sales decline. Organic revenue, which grew at its highest rate since the same quarter 2009, climbed 3.9%. New stores, inflation and an early Easter contributed to a rise in revenue of 4.3% to US$3.9 billion.
The company, which draws over two thirds of its revenue from the U.S. market, anticipates higher operating margins in the second half of the year, said CEO Pierre-Olivier Beckers.
Delhaize, which operates Food Lion and Sweet Bay chains, among others, has tried to attract financially-pressed consumers with reduced prices during this period of tough competition among U.S. retailers.
The group’s operating margins dropped two-tenths of a percentage to 4.1% from a year ago, while U.S. margins, which shrank to 4.2% from 4.5%, year-over-year, helped offset larger margins elsewhere.
The primary source of this article is The Wall Street Journal, New York, New York, on August 5, 2011.