Private Label Magazine Featured Article

The new pan-European private label line is being introduced in its 984 stores located in Belgium, Luxembourg, Germany, Greece, the Czech Republic, Romania, and Slovakia, under a variety of store banners.

Our private label program is an important part of the go-to-market strategy of our European companies," says Pierre-Olivier Beckers, president and chief executive officer of Delhaize Group. "Private Labels are one of the ways to further differentiate ourselves from our competition. High quality, innovation, and exclusive product features can all contribute to add value to our customers and increase their loyalty to our banners.

"In Belgium, more than one third of our sales is realized through private label sales.

"Private labels also offer significant opportunities for cooperation and synergies: in 2004, our European companies cooperated to create 365, a range of basic quality products at prices in line with the hard discounters. The collective purchasing power and the efficiencies resulting from supply chain optimization and common packaging allowed us to offer these products at such attractive prices."

Historically, Belgium is the home market of Delhaize Group. It is where the company opened the first totally self-service supermarket, Delhaize Le Lion, in Europe in 1957.

Above : Delhaize Group operates 2,565 stores worldwide. In Belgium, most of its stores operate under the Delhaize retail banner.

Today, Delhaize enjoys a strong market position and ranks second in Belgium in terms of sales. There are now 125 Delhaize Le Lion supermarkets in Belgium which all offer customer service and a pleasant shopping environment, and feature a huge assortment of high quality products at competitive prices.

Comme chez Soi is an exclusive line of restaurant-quality dishes named after the restaurant operated by chef Pierre Wynants

Absoluut Zweeds is an exclusive line of meals named after the restaurant operated by chef Christer Elfving

The La Peca line of cuisine is named after the restaurant in Italy operated by Nicola and Pierluigi Portinari.

Radisson is the exclusive food line created by Yves Mattagne, the chef of the Sea Grill restaurant at the Radisson SAS.

Wout Bru is the exclusive food line named after the chef who created it.

The AD Delhaize supermarket format started in 1983 and now includes about 200 stores in Belgium and in one in Luxembourg. Most of AD Delhaize stores are open on Sunday. Delhaize Group considers this store format to be its most important growth vehicle today.

In addition, Delhaize Group operates 188 convenience stores under three different names: Proxy, City, and Shop ‘n Go.

Proxy Delhaize is a convenience store with a large offer of fresh products and private labels.

The Shop 'n Go convenience store is a gas station store with longer operating hours.

The City store is a strategically located neighborhood store which exclusively sells Delhaize private label products.

Delhaize also operates its own online retailing Web site: www. caddy-home.be at which grocery orders can be placed online for delivery at home. Of course, customers can also place orders to Caddy-Home by phone and by fax.

In addition to all of its food retailing activities, Delhaize also operates 134 Di shops (drugstore and beauty product store) and Tom & Co, (a pet food and accessories store). Both these store formats are number one in their respective sector in Belgium.

'Private Labels are one of the ways to further differentiate ourselves from our competition. High quality, innovation, and exclusive product features can all contribute to add value to our customers and increase their loyalty to our banners.' -Pierre-Olivier Beckers

In March 2005, Delhaize announced plans to acquire Cash Fresh, a profitable chain of 43 supermarkets mainly in northeastern Belgium. The acquisition will bring Delhaize Belgium's store count to 820 in Belgium, Luxembourg, and Germany at the end of 2005.

Delhaize started to expand its store operations into southern and central Europe at the beginning of the 1990's and now the group operates various retail formats in several countries.

Today, Greece is the strongest of these markets for Delhaize Group with 89 supermarkets called Alfa-Beta, 20 convenience shops called Trofo, and 10 cash & carry stores called ENA Cash and Carry.

The focus of the stores in Greece is offering good quality, fresh products, and good service for a good price. Delhaize stores are geographically spread and are number two in the country in terms of sales. Delhaize employs 6,453 people in 119 stores across the country.

In the Czech Republic, since 1991 Delhaize has operated 94 stores under the name Delvita supermarkets and convenience stores. In 1998, it introduced the Delvita format into Slovakia with 14 supermarkets under that name.

The Delvita stores offer the best quality and service for the best price. The shops are strategically located in various cities of both countries and Delvita is Prague's number one supermarket chain. Delvita recently increased its assortment of private label products from 100 to 500 products. PL products represented 5% of the total turnover in 2003 compared to 2% a year before. Delvita also introduced new products on those markets such as pre-packaged salads, fresh fruit juices, and Italian gourmet products.

In February 2005, Delhaize announced plans to sell 11 Delvita stores in Slovakia.

Under its Crops frozen food label, Delhaize offers several sub-brands such as Rice Express and Steam Express as seen here.

Finally, Delhaize runs 15 supermarkets in Romania under the name Mega Image. This store format is number one in Bucharest.

In 2004, the new strategic initiatives in Europe by the Delhaize Group included:

As Pierre-Olivier Beckers noted earlier, PL products account for more than one third of Delhaize turnover in Belgium and are really the backbone of Delhaize different retail formats in the country. PL products at Delhaize are truly innovative articles that inspire A-brands. Delhaize's innovative approach to PL products is illustrated in the ready meals sector with 200 prepared meals sold under their PL brand. Delhaize has worked in collaboration with Pierre Wynants, the renowned cook at "Comme chez Soi," the 3 Michelin star restaurant in Brussels, to carry a range of premium and inventive fresh chilled meals that are 10 to 15% cheaper than A-brand products in the same category.

Delhaize Belgium is also collaborating with a number of other star European chefs to create exclusive ready meal lines for its stores. They include:

Christer Elfving who is the chef of the Antwerp based restaurant "Absoluut Zweeds," who has created an exclusive line of cuisine for Delhaize under his restaurant's name,

Wout Bru who has helped Delhaize to elaborate a restaurant quality range under his own name,

Yves Mattagne, the chef of the Sea Grill restaurant at the Radisson SAS, who has collaborated with the retailer to create a specialty food line called "Radisson," and

Delhaize is employing large in-store displays-as seen here for its carbonated beverages and fruit drinks-to introduce the new 365 brand of everyday value private label throughout its trading area in Europe.

Nicola and Pierluigi Portinari, chefs of the La Peca restaurant in Italy, who have collaborated on an Italian food range called "La Peca."

Delhaize was also a pioneer in terms of PL organic products. The retailer sells more than 600 organic articles today. It all started in 1985 when Delhaize sold the first organic bread in supermarkets; in 1998 the retailer started its own organic PL range. The sales of organic products at Delhaize represent more than 80 million euros and Delhaize is Belgium's number one retailer of organic products. Delhaize organic PL range uses the sub-brand Bio. It is the symbol for quality, food safety, and traceability, and it is a key player in a country that has been confronted to many food safety crises in the recent past.

On-the Go Bistro is a premium store brand line of appetizers, entrees, and desserts created in 1993 by Hannaford and now being introduced selectively in other Delhaize America retail operations.

Outside Belgium, the other stores of Delhaize Group also sell their own private label ranges under different names.

On the Greek market, Alfa-Beta offers a very broad and varied private label assortment to its customers. This assortment has recently been completed with new value-added products and new labels. The Multicultural Tastes range offers frozen ready to eat meals illustrating culinary traditions from all over the world.

The Vita Care range sells wellness and personal care products. The AB Choice range includes fresh products and is the result of a close and exclusive collaboration between the retailer and its suppliers.

Finally, the Alfa-Beta Close to Greek Nature range offers top quality regional products often from small local producers.

Delhaize Group launched the new 365 brand in May 2004. This PL brand was first sold in Belgium and Greece and was then introduced into all the other European markets of the group. This new 365 brand offers basic products sold at a constant low price all year long, 365 days a year. The peculiarity of the 365 brand is that it is sold under the same name and packaging in the group's different countries and in the different store formats within the different countries.

The 365 assortment is made up of low-price items meeting the everyday and seasonal needs of customers. The first products have been launched in the following departments: grocery, frozen food, beverages, dairy, fruit and vegetables as well as wine. The 365 assortment is constantly being expanded with new products that reached 300 items by the end of 2004 in Belgium and Greece. At the same time, about 50 items of the 365 product line will be available in the Czech Republic, Slovakia and Romania.

The Alpha-Beta chain of supermarkets in Greece offers a broad assortment of private label lines including its Close to Greek Nature range of local artisan products, and its Greek Body line of personal care products.

Bio is a sub-brand under the Delhaize store brand that includes more than 600 organic items. Today, Delhaize

The prices set for the 365 product line match the prices offered by the hard discounters within the different countries in which Delhaize Group competes.

To ensure a constant quality for the whole 365 product line, suppliers comply with the BRC standard as well as with various other strict quality criteria. (BRC stands British Retail Consortium that has established a comprehensive quality system for European retailers.) Moreover, the quality of products is routinely checked by external laboratories.

A strategy of bulk purchasing provides lower production costs. The packaging for the 365 PL line is dynamic and identical for all markets. It represents a common logo: a lion in a sun against an orange background on top of 365. The description of the product is presented in up to 8 languages (French, Dutch, German, Greek, Czech, Slovak, Romanian, and English). This unity conveys a strong European identity to the line but also reduces development and production costs.

Delhaize's aim is to simplify shopping for its customers. When all the 365 PL line products are available, Derby products - the Delhaize private label that competes with the hard discount stores and C-brands products-will disappear. This will simplify the offer, amplify the role of the 365 PL line, and clarify the shopping shelves for an even more convenient and pleasant shopping experience true to the group's motto "Everyday fair price."