Meg Ham’s first year as president of Food Lion has been a time of major change for the Salisbury-based grocer.
Among her tasks: Roll out Food Lion’s new merchandising and pricing strategy across its 1,100 stores. And steer the grocer through a major corporate change, as its parent company, Belgian grocery giant Delhaize, seeks to complete a $10.4 billion acquisition by Dutch retailer Ahold.
All this comes as competition in the low-cost grocery sector heats up. In the Charlotte market, Food Lion faces competitive pressure from the growth of Walmart and two European discount chains.
The key to navigating change and remaining competitive? Agility, Ham says.
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“We need to continue to innovate, to differentiate ourselves in the marketplace,” Ham told me this week.
The chain has been revamping stores under a strategy it’s calling “Easy, Fresh, Affordable.” It includes new store decor, updated product assortments, lower prices and other in-store upgrades like faster check-out lanes. It also includes what the company calls a customer-centric way of training employees.
Ham – former president of Bottom Dollar Food, another Salisbury-based grocer under the Delhaize banner – became Food Lion’s third top executive in less than two years when she assumed the No. 1 spot in early November last year.
The grocery industry veteran is tasked with making Food Lion a leader among discount grocers just as the chain has been scrambling to overcome recent struggles. In 2012, the company closed 126 under-performing stores, including its Bloom brand, in an attempt to strengthen its financial profile. And in 2013, Delhaize sold 155 stores under the Harveys, Sweetbay and Reid’s banners to rival Bi-Lo.
“Our focus right now is mainly on really redefining ourselves,” Ham said during an interview at the grocer’s Salisbury headquarters. “That’s a journey.”
Food Lion has remodeled stores in its Wilmington, Greenville and Raleigh markets so far. The grocer opened a prototype in Concord in late 2013 that features amenities like a walk-in cooler and new registers with bigger screens.
One of the major changes customers will notice as it unrolls its new concept across each market is a change in product selection as consumer preferences evolve, the company has said. The grocer has, for example, expanded its offering of gluten-free food and Greek yogurt while reducing the selection of items that weren’t performing as well, like air filters.
“(Customers are) looking for more natural and organic items, healthier items,” Ham says. “This is where our focus is to ensure we can continue to get deeper into that assortment.”
With the new training, employees will be more knowledgeable about products, Ham says. Instead of just knowing how to sell an item, for example, they will be able to explain to customers how to prepare it.
The company hasn’t said when it will fully roll out the “Easy, Fresh, Affordable” concept in its 142 stores in the Charlotte market, which also encompasses Hickory and Rock Hill. Food Lion has been making some changes locally, though, including lowering prices and adding more in-demand products, Ham says.
Ham says Charlotte customers are already responding well to changes.
Food Lion was Charlotte’s No. 3 grocer last year, though its market share was one of the few to increase from 2013, according to sales-tracking firm Chain Store Guide. Most others lost share as competition grew.
Charlotte’s low-cost grocery industry is becoming particularly crowded.
Walmart, the biggest grocer in the Charlotte area by market share, has been expanding rapidly into the region with its Neighborhood Market concept. European grocery chain Lidl plans to open its first store in the Charlotte market in 2018 and Aldi, another European discount grocer that’s been hosting numerous hiring events across Charlotte, said this summer it will invest more than $3 billion over five years to open 650 new U.S. stores.
Ham says Food Lion’s position as a homegrown retailer helps give it an edge.
“We’re proud of our heritage and proud of being part of North Carolina,” Ham says. “We’re able to deliver the easiest shopping experience in the Southeast with the products that are freshest.”
For now, Ham says, the chain is focused more on implementing its new strategy at existing stores than adding new ones. In fact, Food Lion closed eight stores over the last year. Closing under-performing stores is a “normal course of business,” Ham says.
“We will continue to build new stores, but our focus is mainly on really reinventing and bringing our new strategy ... to life across all stores,” Ham says.
A new corporate parent
Food Lion’s parent company Delhaize agreed to be bought by Dutch retailer Ahold in June for about $10.4 billion worth of shares. The deal is expected to close around the middle of next year, the two companies have said. Ahold operates brands like Stop & Shop, Giant Food Stores, Martin’s Food Markets and Peapod – none of which are in North Carolina.
Ham says it’s “far too early” in the merger process to say what changes will come to Food Lion. She praised the “great geographic blend” of the two companies and said the two share cultural similarities.
But it’s unclear what the deal’s employment impact will be. Food Lion employs about 9,000 store associates in the Charlotte metro area and a little more than 1,900 at its headquarters in Salisbury.
Last year Ham replaced Beth Newlands Campbell, who left “for personal and professional reasons.” Before Newlands Campbell was Cathy Green Burns, who became the public face of the company in its television ads before leaving in late 2012.
Ham joined Delhaize as a retail management trainee right after graduating Cornell in 1988. She says she never thought she’d go into the grocery business, but the fast-paced environment and the people drew her in.
“I really appreciated the culture and it was attractive to me to learn a business from the ground up,” Ham says.
She continues to meet with Ralph Ketner, Food Lion’s 95-year-old co-founder who still lives in Salisbury, on a regular basis to talk business.
“I’ve been very impressed with her,” Ketner says of Ham. “Food Lion started here in 1957 with one store and we were called Food Town. It means so much to North Carolina ... so I wish her well.”