* To cut Belgian workforce by 15 pct over three years
* Belgian margins fallen by 78 pct since 2010
* Says wage costs higher than competitors
(Adds details, analyst comments, share reaction)
By Robert-Jan Bartunek
BRUSSELS, June 11 Belgian supermarket chain
Delhaize will cut up to 2,500 jobs at its Belgian
operations over the next three years, about 15 percent of its
workforce there, to restore margins hit by high wage costs and
tough competition, it said on Wednesday.
Delhaize, which competes with Carrefour, Colruyt
, discounters Aldi and Lidl and increasingly Ahold's
Albert Heijn, said this was necessary as margins at
its company-operated stores had fallen by 78 percent since 2010.
"The announcement does not come as a surprise. The size of
the restructuring is however much larger than anticipated," Bank
Degroof analyst Hans D'Haese wrote in a note to clients.
Delhaize's shares rose as much as 1.7 percent to a two-week
high after the announcement.
The group said wage and benefit costs were 16 percent higher
than at Colruyt and 33 percent higher than at Dutch chain Albert
Heijn, which only recently entered the Belgian market and now
has 20 stores in the north of the country.
"New entrant Albert Heijn has a competitive advantage not
only because its workforce is young but also because it can
source products at a lower price in the Netherlands," KBC
Securities analyst Pascal Weber wrote.
Delhaize, which over the past years has also invested
heavily in a turnaround of its Food Lion stores in the United
States, said it would make an additional investment of 450
million euros ($613 million) in the Belgian stores, mainly
focusing on efficiency programmes and remodelling.
The news comes two years after Delhaize cut around 5,000
jobs and closed stores in the United States and southeastern
Europe. The company, which makes most of its money in the United
States, employed 160,000 people at the end of 2013.
As part of the Belgian restructuring, the group will close
14 underperforming company-operated stores of a total of 147 in
It also has a large number of smaller stores, operating as
franchises, which will not affected by the announcement.
Delhaize is not the only grocer to have felt the pinch in
Belgium. In 2010, French group Carrefour cut about 1,100 jobs
there and closed several of its large hypermarkets.
($1 = 0.7345 Euros)
(Editing by Philip Blenkinsop and Mark Potter)