Delhaize, Food Lion’s parent company, said it will sell all 66 of its Bottom Dollar discount food stores to low-price grocer Aldi.
The announcement comes less than one week after Meg Ham, Bottom Dollar’s president, was named president of Food Lion. She succeeded Beth Newlands Campbell, who stepped down after less than two years. Spokeswoman Christy Phillips-Brown said the two announcements are unrelated.
Belgian-owned Delhaize America and Food Lion are both based in Salisbury. After selling its Bottom Dollar stores to German-based Aldi, Food Lion’s parent company will no longer operate stores in the deep-discount segment of the grocery market.
“Bottom Dollar Food was an unproven concept, which required time and capital to make further progress,” said Delhaize Group CEO Frans Mueller. “We believe these resources can be better used elsewhere.”
In Food Lion stores, the company also said it will phase out its “My Essentials” private label brand and instead bring back the Food Lion name for its private label goods.
The Bottom Dollar sale is expected to close in the first quarter next year. Delhaize said it will receive $15 million in cash for the 66 stores and take an impairment charge of $180 million as a result of the sale.
The Bottom Dollar stores will close and the name will be retired at the end of the year, the company said. The 2,200 employees will be offered severance, and some will receive career transition services.
Bottom Dollar’s locations are all in the Philadelphia and Pittsburgh areas, but the company previously had stores near Charlotte, including in Mooresville.
Bottom Dollar is the latest Delhaize America grocery chain to be sold or shut down. The company previously discontinued its upscale Bloom supermarkets, shuttering the stores or converting them to Food Lions. Earlier this year, the company sold its Sweetbay, Harveys and Reid’s locations to Bi-Lo for $246 million.
In Europe, Delhaize recently sold its supermarkets in Bulgaria, Bosnia and Herzegovina as well.
The company has trimmed its U.S. holdings from seven supermarket chains to two. After the sale to Aldi, Delhaize America will operate only Food Lion and Hannaford supermarkets, with Food Lion in the Southeast and Hannaford in the Northeast.
The vast majority of Delhaize’s stores in the U.S. will be Food Lion, with 1,100 locations. Hannaford operates about 180 supermarkets.
Delhaize reported its sales and operating profits rose in the third quarter, driven by strong sales in the U.S., which make up almost two-thirds of the company’s revenue. Profits were up 2.4 percent to $239 million.