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Delhaize Group SWOT & PESTLE Analysis

ID : 5283353| Mar 2019


Business Sector :Retail (Food)

Operating Geography :Europe, Belgium, Global

About Delhaize Group :

Delhaize Group is a leading food retailer headquartered in Brussels, Belgium and has presence across seven countries including Belgium, United States, Luxembourg, Indonesia, Russia and Serbia.

Delhaize Group Revenue :

24.4 Billion Euros (US $27.39 Billion) – FY ending March 2016

Competitive Analysis of Delhaize Group

The SWOT analysis for Delhaize Group is presented below:
1. Strong private brands portfolio
2. Unique shopping experience
3. Well-established local presence
4. Strong Financial Performance
5. Enhanced sustainability focus
1. Largely dependent on US market for revenue
2. Sensitive expansion strategy
3. Affiliated stores/Franchisee model problems
1. Leveraging e-commerce for sales
2. Post-merger benefits
3. Omni-channel business model
1. Regulatory clearances from various authorities for the merger
2. Increased competition from discounters
3. Macro-economic risks
4. Switching of key stakeholders
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Detailed SWOT Analysis of Delhaize Group


1) Strong Private product/brand portfolio: Delhaize group has a diverse brand portfolio with brands spread across products fruits and vegetables, dairy products, sweets, bread, and meat specialities. With customers becoming more health conscious, the group has ventured into gluten free, sugar free and no-sodium food products. It also launched a private brand “Gusturi Romanesti” in Romania.

2) Unique shopping experience: Delhaize group has a strong network of 154000 associates who are trained to deliver the best customer service. The company has different customer-centric training programmes across geographies like “Count on Me” in Delhaize Serbia, “Power of you” at Hannaford’s in USA, and Associate engagement surveys.

3) Well-established local presence: Delhaize group has a strong network of local producers, suppliers, and associates. It bases its offerings on the characteristics of the local communities resulting in strong customer loyalty and retention.

4) Strong Financial Performance: Despite economic slowdown in several of the countries where it operates, Delhaize group has shown strong sales growth. The group posted 2.2% growth in USA, 1.3% in Belgium, and 3.5% in south-eastern Europe in comparable stores sales (CSS) over 2014. The group attained overall profits of Euro 872 million.

5) Strong sustainability focus: Delhaize group is among the four food retailers featured on the Dow-Jones sustainability index which is a leading benchmark for investors with sustainability considerations.


1) Largely dependent on US market for revenues: Delhaize group has a network of 1288 stores in the USA resulting in revenues of close to Euro 16 million, about 66% of their total revenue came from operating brands Food Lion and Hannaford. The company’s operations largely depend on the economic conditions in this area.

2) Sensitive expansion strategy: The Company’s expansion strategy is largely dependent on purchasing or renting properties suitable to their needs. If the company fails to renew the lease or secure the properties on commercially acceptable terms, there could be a negative impact on its business.

3) Affiliated store/Franchisee model problems: Close to 23% of the company’s sales network consists of affiliated stores or franchised stores. Although the operators of the franchisees are trained properly, the company faces a significant challenge aligning operator standards with the group standards. This could have significant impact on the Company’s reputation among customers.


1) Leveraging E-commerce for sales: The rise of e-commerce is aided by the growth of online shopping. E-commerce would offer Delhaize group a competitive advantage in the food retail landscape, where profit margins are narrow. The company has online presence in the USA through Food Lion’s, which provides customers a seamless online experience.

2) Post-merger benefits: The announcement of merger with Koninklijke Ahold N.V. will create a network of 6500 stores and 375000 associates across United States and Europe, serving close to 50 million customers per week. This projected turnover for the group after the merger is Euro 65 billion and expand the group’s presence across Netherlands, Czech Republic and Portugal. With this merger, Ahold Delhaize will become the largest food retailer in the USA east coast.

3) Omni-channel business model: Companies in the food retail business operate across several channels – hypermarket, discount, dollar, club and online retail channels. Since customers want favourite products at low prices, they do not distinguish between channels. This offers Delhaize group a unique opportunity to offer their already superior shopping experience across all channels through an Omni-channel model.


1) Regulatory clearances required for merger: The merger requires approvals, consent and clearances for antitrust laws of the EU, relevant EU states, Republic of Serbia and the Republic of Montenegro. The rounds of requests for information from various authorities and time taken to fulfil the requests and grant clearance could result in the delay of the merger and material costs to the organization.

2) Increased Competition: The food retail sector is one of the most competitive sectors with narrow profit margins. The group faces stiff competition from hypermarkets, club stores and alternative formats. Competing on price could significantly reduce net income and cash flow generated from operations.

3) Macro-economic risks: The markets for Delhaize group- home markets Belgium and Luxembourg, as well as foreign markets in Greece and Serbia, are facing an economic slowdown with low interest rates and deflation risks, post sovereign debt crisis and cut in oil prices. The company’s European buying alliance Coopernic, faced challenges due to increased pressure on sales and marginsin the retail sector. In addition, concerns of a global recession on a recovering economy like USA could negatively impact consumer spending.

4) Switching of key stakeholders: Delhaize faces significant integration challenges post-merger with Ahold. This uncertainty could cause significant disruption as customers, suppliers and partners try to re-negotiate their business relationship with Delhaize or switch to competitors. Delhaize will also face significant employee retention challenges due to uncertainties about job roles.

Delhaize Group SWOT analysis has been conducted by Sanjeev Raman and reviewed by senior analysts from Barakaat Consulting.


1. Delhaize group Annual Report:

2. Ahold Annual report:

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Delhaize Group SWOT & PESTLE Analysis
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