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Revenue, comps rise for Delhaize America in Q3

BY CSA STAFF

SALISBURY, N.C. — Network growth and higher retail inflation prompted growth in both revenues and comparable-store sales for Delhaize America, the U.S. division of Delhaize Group, for the third quarter ended Sept. 30.

Revenues realized a gain of 3.5% to $4.9 billion, compared with the year-ago period, while comparable-store sales jumped 1.9%. Delhaize, however, acknowledged that due to the economic environment and the decrease of consumer confidence, particularly in the southeastern United States, volume trends were down from the previous quarter.

The company also noted that operations were disrupted by Hurricane Irene, which resulted in the closing of 350 Food Lion stores for several days. Additionally, Delhaize America also accrued $10 million in other operating expenses — mainly due to product losses and inventory write-offs — which were partially offset by impairement reversals (worth $5 million) at Sweetbay banner stores.

Despite these setbacks, the company forged ahead with its relaunch of 200 Food Lion stores in Raleigh, N.C., and Chattanooga, Tenn., pilot markets, reporting that comparable-store sales growth increasingly outpaced the rest of the network, despite the additional price investments in the stores. Delhaize America said the company "intends to have completed the roll out of this work to between 700 and 800 stores in total by the end of 2012."

Delhaize America also said that its Bottom Dollar Food stores in Philadelphia have garnered positive feedback, while its Northeast Hannaford stores also saw a good performance, which was in line with the trends seen in the previous quarter.

Commenting on the results, Delhaize Group president and CEO Pierre-Olivier Beckers said, “We are pulling the right levers is evidenced by the momentum in the rebranded Food Lion markets that continue to deliver excellent results and outperform the rest of the network. At the same time, the economic environment, especially in the southeast of the U.S., continues to weigh on customer sentiment and their spending behavior.”

As of Sept. 30, Delhaize America had 1,640 supermarkets in operation.

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Survey: Consumers consider expected savings before shopping

BY CSA STAFF

NEW YORK — Shoppers today are more knowledgeable than ever when it comes to finding deals on their favorite products, and many won’t even set foot in store until they have an idea of their potential savings, according to the Deloitte/Harrison Group annual American Pantry Survey.

The survey found that for nearly 30%, at least seven of 10 items in their shopping cart is discounted. What’s more, 80% of them say they do their own research and have a firm idea about what they expect to save before they step into a store. In addition, 66% of consumers shop when they know products will be on sale.

"Shoppers today expect to get a deal on the products they purchase," said Pat Conroy , vice chairman of Deloitte LLP and consumer products sector leader. "With this mindset it is critical that consumer products companies take measures to enhance brand loyalty by connecting early and often with key audiences in environments outside of the store."

The survey found that consumers believe they are smarter and more efficient when it comes to shopping. Three-quarters (75 %) of survey respondents said that that they are smarter shoppers than they were a year ago, and nearly 86% believe they are getting more precise in what they buy. Additionally, 80% of consumers say they have become more efficient at getting in and out of the store in 2011.

"Smarter shoppers know what they want, and how to get it for the best price," said Conroy. "As they become more efficient — while the consumer products industry increasingly faces a ‘crisis of similar’ — companies looking to thrive must find ways to differentiate themselves from their competition."

The survey found that 90% of shoppers go into a store knowing what they’re buying, and 83% have a set of brands in mind that they will consider. Moreover, 80% of shoppers indicate that the recession has caused them to realize what brands they care about and which ones they don’t, the survey found.

The study has some implications for private labels or store brands, as almost half (49%) of shoppers saythey are no longer interested in trying private labels or store brands. Furthermore, 90% of shoppers say that they have already have a sense of what brands and private labels work for their families — and which ones do not — while nearly the same amount 88% of consumers claim they have established which store brands and private labels are good, and which ones are not.

The 2011 American Pantry Study was conducted by Deloitte and Harrison Group. The survey polled 4,086 household shoppers and food preparers in the U.S. from Oct. 6 to Oct. 21 and has a margin of error of plus or minus 1.5 percentage points.

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HD’s Menear points to merchandise highlights

BY CSA STAFF

ATLANTA — Atlanta-based Home Depot’s wind-and-storm aided sales effort in the third-quarter presented several category highlights, according to EVP merchandising Craig Menear.

The company’s strong third-quarter performance, which included a 13% net earnings increase and comp-store sales of positive 4.2%, included strength "in the core of the store" and growth in average ticket and transactions.

"The maintenance and repair categories that make up the core of our store continue to perform well," Menear said, during the company’s third-quarter earnings call. "Project basics such as pipes and fittings, fasteners, air circulation, hand tools, chemicals, caulks and appliance parts were positive. And, as customers prepared for winter, small maintenance projects like insulation and waterproofing also sold well."

In addition to storm-related sales strength, the company saw higher than company average comps in tools, electrical, indoor garden, building materials, plumbing and hardware.

Ten departments in all posted positive comps, with paint, flooring, lighting and kitchens rounding out the list.

Negative comps for the third quarter occurred in the following categories: lumber, outdoor garden, bath and millwork.

Brands and product innovation played a role in sales growth, he said. “We offered outstanding values in power tools from brands like Ryobi, Milwaukee, Makita, Ridgid and DeWalt, and we are seeing consistent response to these brands from our customers," he said. Pro customers are responding well to exclusive-to-Home Depot hand tools from Milwaukee and DeWalt, he added.

LED lighting continues to advance on the shelves, with the first commercially available 75-watt equivalent LED A-Line replacement, he said.

The Home Depot’s chief merchant also shared the following third-quarter trends with investors:

  • Total transactions grew by 1.2%.

  • Average ticket increased 3%.

  • Transactions for tickets under $50 — about 20% of the company’s U.S. sales — were flat in the quarter.

  • Transactions for tickets more than $900 — also representing some 20% of U.S. sales — were up 3.6% in the quarter.

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