Delhaize suffers losses in Eastern Europe

Brussels-based supermarket chain Delhaize suffered an unexpected loss of €45 million in the second quarter of the year, mostly due to problems with the group’s operations in Serbia, the company reported. 

Delhaize’s problems in Serbia stem from the country’s economic instability, with negative economic growth and retail deflation. Those problems alone prompted the company to declare a reduction in assets of €151 million.

Meanwhile, Delhaize has completed the sale of 39 stores in Bosnia to Tropic Group. Now the Serbian stores are all that remains of the Delta Maxi group Delhaize took over in 2011. The group has already sold its holdings in Albania, Montenegro and Bulgaria.

At home, Delhaize also reported problems, including pressure on price margins and market share. Although CEO Frans Muller referred to “market share loss,” the company has declined to reveal a figure. Turnover in Belgium was down 1.2%, but sales overall were up 0.5% to €5.27 billion – largely as a result of strong growth in the US of 3.3%.

The underlying results, excluding the Serbia-induced loss, were within expectations, and the company’s share price rose 5% in the course of the day.

In June, Delhaize announced that 14 stores in Belgium would close and 2,500 staff made redundant,  leaking to industrial action across the country.

photo courtesy Delhaize