UPDATE 1-Delhaize profits fall as food inflation bites

BRUSSELS, March 7 (Reuters) – Belgian supermarket group Delhaize on Thursday posted worse-than-expected fourth quarter operating profit as it struggled to pass on food inflation costs to cash-strapped consumers.

Adjusted operating profit for the fourth quarter fell 13.6 percent from 2010 to 272 million euros ($357 million) – below the 289 million euros expected in a Reuters poll of 12 analysts.

Delhaize, which makes about 65 percent of its revenue in the United States, said this was mainly the result of weak sales and being unable to charge higher prices to U.S. consumers, especially in the southeast of the country.

“Food inflation (was) particularly high in the second half of the year,” Delhaize said in a statement.

Rival Kroger Co, the biggest U.S. supermarket chain, earlier said food cost increases moderated slightly during the fourth quarter.

Delhaize said in January it would cut close 113 underperforming stores in the United States and a further 20 convenience stores and supermarkets in Bulgaria, Serbia and Bosnia and Herzegovina, cutting 5,000 jobs.

Delhaize said on Thursday its cost savings target of 500 million euros should be exceeded by the end of 2012.

Delhaize said it would appoint Pierre Bouchut as the new chief financial officer of the group, replacing Stefan Descheemaeker, while Mats Jansson would take over as chairman of the board.

The group will pay a dividend of 1.76 euros per share for 2011. ($1 = 0.7622 euros) (Reporting by Robert-Jan Bartunek; additional reporting by Eric Holmberg; editing by Rex Merrifield)

http://www.reuters.com/article/2012/03/08/idUSL5E8E76O720120308

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