Delhaize Group SA (DELB), the owner of Food Lion supermarkets, plans to cut about 5,000 positions and expects a 2.4 percent drop in revenue as it closes stores in the U.S. and Europe.
Costs related to the closures will hurt earnings by about 205 million euros ($261 million) starting in the first quarter, the Brussels-based company said in a statement today. Closing 146 outlets and converting 64 others will cut the number of shops by about 4.3 percent and initially lower revenue by about 500 million euros, or 2.4 percent, Delhaize said.
“We are disappointed in the fourth-quarter revenues in the U.S. and Belgium,” Chief Executive Officer Pierre-Olivier Beckers said in the statement. “Consumers continued to feel pressured in the fourth quarter due to the macro-economic environment and this led to a reduction in spending. We also encountered an increase in competitive activity.”
Consumers continue to be hurt by high levels of joblessness in the U.S. and Europe. The U.S. unemployment rate, which was 8.5 percent in December, may continue to curb spending in the world’s largest economy, where Delhaize gets most of its revenue.
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