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Food Lion

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Food Lion LLC
Company typeSubsidiary of Delhaize Group
IndustryRetail
Founded1957
HeadquartersSalisbury, North Carolina, U.S.
Number of locations
1300 Stores (2009)
Area served
Georgia, South Carolina, North Carolina, Tennessee, Kentucky, Virginia, Florida, West Virginia, Maryland, Delaware, and Pennsylvania
Key people
Carol Herndon, CAO
ProductsGrocery
Number of employees
73,000
Websitehttp://www.foodlion.com/

Food Lion LLC is an American grocery store company headquartered in Salisbury, North Carolina that operates approximately 1,300 supermarkets in 11 Southeast and Mid-Atlantic states under the Food Lion, Harveys Supermarket, Bloom, Bottom Dollar Food, and Reid's banners. With approximately 73,000 associates,[1] Food Lion LLC is the largest subsidiary of Delhaize Group. Delhaize Group is a food retailer headquartered in Belgium which operates in 7 countries. Delhaize Group was founded in Belgium in 1867. The principal activity of Delhaize Group is the operation of food supermarkets in North America, Europe and Southeast Asia. Supermarket News ranked Delhaize America No. 10 in the 2007 "Top 75 North American Food Retailers" based on 2006 fiscal year estimated sales of $17.3 billion.[2]

History

Food Lion was founded in 1957 in Salisbury, North Carolina as Food Town by Wilson Smith, Ralph Ketner, and Brown Ketner. The Food Lion name was adopted in 1983,[3] several years after Belgium-based grocer Delhaize acquired the Food Town company.[4] The name change, while puzzling for American customers, made economic and historic sense for Delhaize. Once known as "Delhaize Le Lion," the Belgian company was able to re-brand its new American subsidiary by changing just two letters on the "Food Town" signage.

Banners

Food Lion

Food Lion in Durham, North Carolina.

Food Lion is the namesake concept for Food Lion LLC and is centered around building a neighborly and convenient supermarket for its customers featuring "extra low prices" on name brand and private label merchandise. The MVP Loyalty Card is a staple of the Food Lion pricing strategy. With the MVP card a consumer is entitled to obtain selected items for 5 to 15 percent less than they cost at other stores, while consumers without cards will pay only slightly more. While at one time Food Lion's concept generally lacked the "bells and whistles" of its competitors, the company has been adding fresh seafood, deli and bakery departments, cheese, pharmacies and butcher departments over the last few years. Most Food Lion locations were renovated in 2007, removing the white and red storefronts and introducing a brown storefront with an upscale interior featuring a brick-sign designs inside. As of December 2009 Food Lion had 1169 stores in Florida, Georgia, South Carolina, Tennessee, Kentucky, North Carolina, Virginia, West Virginia, Maryland, Delaware and Pennsylvania.

Bloom

Main article: Bloom (store)
Bloom store in Accokeek, Maryland.

Bloom is Food Lion's upscale grocery model that opened on May 26, 2004. The concept is based on the idea of using a slightly unconventional layout to maximize shopper convenience. Bloom also allows their customers to use Personal Scanners to scan items as they put them in their cart. These scanners keep a running total and allow easy price checks. When the stores first debuted, Bloom was dubbed with the phrase "A Food Lion Market". However, upon further market research, the company decided to remove the phrase and conceal the Food Lion connection altogether. The current service-mark was replaced with the slogan "A Different Kind of Grocery Store".

As of December 2009, there were 65 Bloom stores in North Carolina, South Carolina, Maryland and Virginia.[5] However, with the Food Lion "market renewal" in progress, this number is increasing as various Food Lion stores are converted to Bloom as needed.

Bottom Dollar Food

Main article: Bottom Dollar Food

Bottom Dollar Food is Food Lion's discount grocery model that focuses on offering a limited-selection of both national brands and private label products at low prices in an "upbeat" shopping environment. These stores have no bakeries or delis and more items are prepackaged. Customers buy the bags used to sack their own groceries at Bottom Dollar Food. Stores also use alternative display and stocking techniques such as cut cases on shelves, using pallets and dump bins to reduce costs. Food Lion opened the first Bottom Dollar Food model in High Point, North Carolina on September 21, 2005.

As of December 2009, Bottom Dollar Food had 28 stores in North Carolina, Maryland, Pennsylvania, and Virginia.[6] However, with the Food Lion "market renewal" in progress, this number is increasing as various Food Lion stores are converted to Bottom Dollar Food as needed.

Harveys Supermarket

Main article: Harveys Supermarket

Harveys stores are mainly located in rural markets within the Deep South with a focus towards quality foods (primarily in meat and produce) and service. Since being acquired by Delhaize in 2003 (marking the end of US-based ownership), over a dozen Food Lion stores in rural areas have been converted to Harveys. Unlike Bloom and Bottom Dollar however, which are merely extensions of the Food Lion brand, Harveys appears to operate separately within the Food Lion LLC structure and is seen more as a subsidiary.

As of December 2009, there were 70 Harveys stores in Florida, Georgia, and South Carolina.[7]

Reid's

Reid's is a small chain of stores located in various rural South Carolina communities, specifically Barnwell, Orangeburg, Langley, New Ellenton, Batesburg, Walterboro, St. George, Aiken, Saluda, Cayce, and Hampton. Most of these stores were all formerly branded as Food Lion stores and continue to carry Food Lion branded goods and use the Food Lion infrastructure. The common theme to these stores appears to be that they are all older stores which Food Lion has apparently determined are located in markets small enough to make enlarging or opening a new store unprofitable, but which with a different brand name to differentiate them from Food Lion so that the prices and selection can be different from a standard Food Lion store and can still be profitably run without remodeling. Some exception's to this standard is the Langley location, which was converted from a new Food Lion store which had been open for only a few months, The Cayce location which is located in a former Winn Dixie and replaced the Food Lion located on Charleston Highway in West Columbia SC in 2009, The Hampton SC store is a new location located in a Former Bi-Lo which moved in 2005.

Reid's advertises mainly via newspaper ads with occasional television ads when a new store "opens." Their ad is also available on their website or their Facebook page, as well as the websites of The People-Sentinel, a newspaper serving Barnwell County, South Carolina and The Aiken Standard, which serves Aiken County, South Carolina. Reid's also runs sale advertisements on several radio stations in South Carolina, featuring the chain's namesake Reid Boylston reading the week's specials over the phone and closing with an exuberant recitation of the chain's slogan, "We can save you money!"

Hannaford

Main article: Hannaford Bros. Co.

Founded in 1883, Hannaford Bros. now operates more than 150 stores in New England and New York. In 2000, Delhaize America bought Hannaford, marking the end of US-based ownership (which originated in Portland, ME).

Market renewals

Since 2003, Food Lion has been active in "market renewals" in which every year Food Lion picks certain cities in their operating area where they remodel stores and update the product offerings. In 2006, Food Lion advanced their market renewals program by using in-depth demographic and geographic data to figure out whether certain stores should be branded as Food Lion, Bloom, or Bottom Dollar. Should the data support that an already existing Food Lion is adequate for a certain community, the location will simply be remodeled. Should the data support otherwise, the Food Lion store will be remodeled and re-branded as either Bloom or Bottom Dollar.[8]

Expansion and retreat

Throughout the 1980s Food Lion expanded throughout the Mid-Atlantic and Southeastern United States, succeeding where many supermarket stalwarts weren't. When names such as A&P, Grand Union, Colonial/Big Star and Piggly Wiggly disappeared from Southern communities, Food Lion remained. The company continued its expansion throughout the late 1980s, opening hundreds of stores in existing markets such as the Carolinas and Virginia, and entering new states and markets such as Georgia, West Virginia, Kentucky, Tennessee and Maryland.

In the early 1990s, Food Lion stores appeared in additional new markets, such as Delaware and southern Pennsylvania; Orlando, Florida; Oklahoma City and Tulsa, Oklahoma; Shreveport; the Dallas/Fort Worth Metroplex; and Houston and Tyler, Texas. During this time, the chain was the fastest-growing supermarket company in the U.S., as it opened over 100 new stores each year. In November 1992, a critical PrimeTime Live report that showed unsanitary handling of meat and seafood hurt the chain as it attempted to enter new markets in the Northeast and Southwest. (See ABC PrimeTime Live section, below.)

According to some industry sources, the new stores in Texas, Louisiana, and Oklahoma were already operating below sales projections. The small, lackluster Food Lion stores were beginning to compete with national retail leaders, such as Albertsons, Kroger, Tom Thumb, and Jewel-Osco--all of which were already well-respected in the Southwest and which operated larger stores with more features. But the effects of the devastating ABC report could not be denied, and sales and revenue plummeted. In the Dallas/Fort Worth Metroplex, there were widespread reports of stores sending half of their staff home early due to lack of business and of other stores with "virtually zero meat sales." In the fiscal quarter that included the Thanksgiving and Christmas holidays of 1992, Delhaize America reported company-wide same-store sales declines of 9.5%. As a result, Food Lion was forced to greatly scale back its expansion plans in Texas and Oklahoma, as well as delay its planned entry into new markets in Missouri, Kansas, and Illinois.

In 1993, Food Lion agreed to pay $16.2 million to settle claims it violated federal laws regulating unpaid overtime, minimum wage, and child labor, according to the U.S. Department of Labor. In the agreement, which at the time was the largest settlement ever from a private employer accused of violating the Fair Labor Standards Act (FLSA), the grocery chain agreed to ensure that all employees will be well informed about their rights. Additionally, the Labor Department said Food Lion's top management has provided assurances that no retaliatory action will be taken against employees who may file complaints about unpaid overtime or other potential FLSA violations.[9]

On January 7, 1994, Delhaize announced the first major round of store closings in what would become a yearly event. The stores to be closed included 47 of its brand-new stores in Texas and Oklahoma as well as stores in Florida, Georgia, Kentucky, North Carolina, Pennsylvania, South Carolina, Tennessee, and Virginia.[10]

Throughout the mid-to-late 1990s, the company canceled leases for new stores and closed scores of its newly built outlets in recently established markets such as Dallas/Fort Worth, Houston, and Oklahoma City. Citing double-digit same-store sales declines for the quarter ending in September 1997, Delhaize announced that it was canceling its Midwest expansion, exiting all markets in Texas, Oklahoma, and Louisiana, and closing its 6-year-old distribution center in Roanoke, Texas. A bruised and battered Food Lion was forced to recede back to the East Coast, where it faced increasing competition from competitors with larger stores, better customer service, and more variety and amenities; these included regional winners such as Lowes Foods, Harris Teeter, and Publix; newcomers like specialty retailer Whole Foods Market; and expanding national chains such as Kroger, Target and Wal-Mart Supercenters.

International stores

Food Lion spent seven years attempting to establish a presence in Bangkok, Thailand. Operated locally by Bel-Thai Supermarket Co, in 2004 it withdrew from the country, selling all branches to Tops Supermarkets.[11]

Slogans

"Extra Low Prices" - 1990s-Early 2000s

"Good Neighbors, Great Prices" - Early 2000s-present

"LFPINC (LFPISC or LFPIVA)" - During the Food Town era. Slogan stood for "Lowest Food Prices In North Carolina" Also used in South Carolina and Virginia stores.

Primetime Live

In the 1990s, Food Lion gained a degree of notoriety when it was the subject of an ABC News investigation. ABC had received a tip about unsanitary practices at Food Lion. Two ABC reporters had posed as Food Lion employees, and witnessed the unsanitary practices at Food Lion. Much of what they had seen was videotaped with cameras hidden in wigs that they were wearing. The footage was then featured in a segment on the news magazine Primetime Live, in which Food Lion employees described unsanitary practices, which included bleaching discolored, expired pork with Clorox and repackaging expired meats with new expiration dates, and the use of nail polish remover to remove the expiration dates from dairy item packages.

The company responded by suing ABC for fraud, claiming that the ABC employees misrepresented themselves; for trespassing, because the ABC employees came on to Food Lion property without permission; and for breach of loyalty, the ABC employees videotaped non-public areas of the store and revealed internal company information. During the court battles between Food Lion and ABC, over 40 hours of unused footage were released that helped Food Lion's case. In the unused footage, two undercover producers are seen trying to encourage violations of company policy; however, employees resisted and correctly followed sanitary practices.[12]

Food Lion was awarded USD$5.5 million by a jury in 1997. The award was later reduced by a judge to $316,000. The verdict was then overturned by the U.S. Court of Appeals Fourth Circuit in Richmond, Virginia. According to the court, even though ABC was wrong to do what they had done, Food Lion was unable to show that they had been directly injured by ABC's actions - essentially that it was the actions of Food Lion that caused the damages, not the publication of those actions.

An indirect result was that Food Lion ended up exiting the Houston, Oklahoma, Louisiana, and Dallas/Fort Worth Metroplex markets, which it had recently entered. The Dallas/Fort Worth market is highly competitive, and the stores were already being criticized for being too small and lacking the amenities desired by the local shoppers—for example, Food Lion did not include pharmacies in its stores.

References

  1. ^ Fast Facts, Food Lion, Last accessed May 14, 2007.
  2. ^ 2007 Top 75 North American Food Retailers, Supermarket News, Last accessed February 24, 2007.
  3. ^ http://www.delhaizegroup.com/divclassdg_MenuText_RedTHEGROUPdiv/History/tabid/86/Default.aspx
  4. ^ http://www.delhaizegroup.com/divclassdg_MenuText_DarkBlueCOMPANIESdiv/USA/tabid/102/Default.aspx
  5. ^ Bloom Store Finder, ShopBloom.com, May 14, 2007.
  6. ^ Bottom Dollar Website, BottomDollarFood.com, May 14, 2007.
  7. ^ Harveys Website, Harveys-Supermarkets.com, May 19, 2007.
  8. ^ Delhaize Group 2006 Annual Results, Delhaize Group, Last accessed April 1, 2007.
  9. ^ Dept. of Labor and Food Lion enter into $16M wage-hour settlement, Jet, August 30, 1993.
  10. ^ 1994 Form 10-K, Delhaize America, Inc. Last accessed February 25, 2007.
  11. ^ The Bangkok Post. Food Lion pulls out of Thailand, August 6, 2004. Retrieved on 2009-03-28
  12. ^ "ABC's Food Lion Lies: A Study in TV Deception", Last accessed 8/25/08.

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