Delhaize loses its Bloom, and other US stories
A&P in purgatory, Fresh & Easy struggling. And now for the news: Bloom is closing …
Last time I tried to take a couple of weeks off, India agreed to retail FDI. Luckily, by the time I was back at work the government had performed a swift U-turn, so I’m glad I didn’t bother panic-writing something about it. This time, a few major US retail stories slipped out of the net while I was still mainly eating brandy butter. And I don’t see them becoming non-stories by tomorrow so here goes.
First up: A&P wants to close 14 stores
Fourteen? Why not close the lot and have done? In a statement, CEO Sam Martin said: “We are continuing to take the steps necessary to position A&P to emerge from Chapter 11 with a strong future.” If it comes out of Chapter 11 doing the same stuff that put it in there, then the future seems doubtful, let alone strong. Change the model, change the approach, change the brand, change the experience, change the management. In short, invent a new company that is better than the bankrupt one. Closing a few stores is not gonna do it.
Next: Fresh & Easy wants to close 12 stores
Tesco’s US effort has some unfortunate news, just to make a change. “Like any retailer,” the announcement begins, before continuing: “We have decided to temporarily close 12 underperforming stores.”
Will they suddenly perform better with the doors shut? This screams urgent cashflow disaster, no more, no less. Looks like Tesco can’t afford to trade from the stores but doesn’t want to lose the sites. But what is a temporary closure, really? Have the staff only temporarily lost their living? Should they be looking for temporary jobs elsewhere?
If so, they can’t count on Delhaize:
The Belgian Behemoth has decided to shut down its “upscale” US banner Bloom and close a raft of Food Lion and Bottom Dollar stores, laying off 4,900 employees in the process. This is a major upheaval for the company, which relies on the US market for 68% of its revenue and 71% of its profits, according to its most recent published figures.
Some pundits are saying this proves the doomy ‘n’ gloomy US market can’t support an upscale banner right now. Nonsense. Whole Foods and Wegmans haven’t closed down. All this proves is that Bloom was not very good at what it set out to do. I went to one once, near DC. It was, frankly, a bit weird and didn’t feel at all upscale. It felt like a regular store with fewer things on sale at higher prices. Of course, that store may not have been typical, but having listened to Delhaize present convincingly on the glorious science of consumer cluster profiling — which costly process the boffins there had used to invent the banner — I went with great expectations and came away feeling distinctly underwhelmed by the assortment, shopfit, experience and price point. I thought I was being overly critical, but I guess I wasn’t the only one.
The existence of other retailers peddling an upmarket grocery shop stateside shows that Delhaize was not wrong to to target a more affluent consumer. They just didn’t know how to do that. High prices and lower-case typography aren’t enough. You want to come away feeling like you’re a little special. The experience should flatter you, indulge you. It’s emotional. That’s how it works. That’s not what Bloom did. Plus, the logo made it look like a printing company. It was also home to the odd product icon “Chef Inspired”. Which is a bit like saying Kraft Mac & Cheese is inspired by food.
What I like about Delhaize, though, is that it is (a) not afraid to innovate, (b) not afraid to fail and (c) not afraid to make tough but sound decisions to stay in the game. If only A&P could take a leaf out of that book.
Picture credit: Bloom