Food Lion is Steam Lining Corporate

Part of being the low cost provider is being able to provide the lowest products than it's competitors.  Now Food Lion is looking to reduce costs at it's corporate head quarters.  The company will be stream lining it's support operations by combing departments and eliminating redundancy brought on from the over staffed corporate facility.  The plan will be to increase efficiency and provide more effective support to the retail operations.  The new simplified structure will create a stronger foundation to better support their future growth strategies.

Food Lion And Energy Savings

Foods Lion is always looking for ways to reduce cost and bring down prices.  An initiative they have been following for several years is reduction in energy usage.  In the grocery business energy costs make up the second largest expense category at 10% of overall budgeted expenses.  Food Lion has taken aggressive efforts to reduce energy consumption and has saved nearly $104.8 million since it began the reduction initiative.  Over 400 of the chains stores have received the Energy Star award for energy efficiency.  One example of what they are doing to reduce electricity usage is only using half the lights during non peak hr week days.  Once the peak hrs of customer traffic comes they turn on all the lighting.

Food Lion Brand Stategy

Food Lion is recently decided to increase it's private brand strategy.  The strategy consists of a three tiered approach that includes value, national brand equivalent and premium brands.  Food Lion will compete by aggressively pricing their products against other major labels.  They will be giving consumers a product that exceeds in quality compared to the major label their competing against.  The goal is to increase their own brand recognition and capture a higher percentage of the market.  These targeted products are items that are highly consumed and have the greatest potential for sales.  The brand names you will see are Natures Place, Healthy Accents and Taste of Inspiration.  Natures Place will be aimed at natural and organic foods.  Health Accents will be consisting of health and beuty products.  Taste of Inspirations will be all consumables that are not organic or natural.  This new brand strategy is tying back into the overall strategy of competing against Wal-Mart their biggest competitor. 

Food Lion Is Updating It's Stores

Food Lion has begun an aggressive remodeling campaign designed to help expand it's product offerings.  They are moving to a more more mainstream supermarket with expanded bakery, produce, deli, and meat departments. It's old strategy was to limit it's product to a variety of specific popular, fast-selling items.  They have recently changed their strategy to a becoming a low cost provider to compete against Wal-Mart.  The remodeling process will also include changing the decor to further enhance the shopping experience.   

Food Lion is looking to pursue a focused low cost provider

Food Lion has has launched a low cost provider strategy designed to bring prices down in it's 1,300 stores.   The company is reducing expenses by 256 million and funneling most of those savings into cuts in food prices.  The reductions will range across several categories including cereal, produce, milk, and bread.  This new strategy is aimed at competing against it's biggest rival Wal-Mart.  It's the intent of Food Lion to be the low cost alternative to it's competitors giant super centers. 

The idea is a solid strategy given that Food Lion has multiple stores located in every town or city they operate in.  Unlike Wal-mart who has one super center in every town or small city.  Many people don't want to travel to a Wal-Mart when they can stop in a local Food Lion that has comparable prices.  They also don't have to fight their way through a giant store to find the grocery items they want.  In this depressed economy it's a good strategy to compete against Wal-Mart. 
 

SWOT Analysis of Food Lion

Food Lions Strengths:

Many locations- lead to increased foot traffic
Customer Service- Customers come back to the places they feel appreciated
Have fresh meats- many large chains are giving consumers prepacked meats from the manufacturer
Low cost strategy
Strong Regional Presence


Food Lion Weaknesses

Bad image on perishables
Populations flat in key markets of operation
Not the best real estate


Food Lion Threats

Labor Unions
Strong competition from Wal-Mart


Food Lion Opportunities

Increase private label image
Shopper segmentation strategy
Continue to improve low costing strategy