Hannaford parent lays off 350; Scarborough affected
SCARBOROUGH — Delhaize America, owner of Hannaford Bros. Co., is laying off 350 corporate employees, including an unspecified number at the supermarket chain’s headquarters.
Michael Norton, a Hannaford spokesman, wouldn’t confirm how many of the 350 layoffs would take place in Scarborough, where the company employs roughly 1,000 people in corporate, back-office functions.
“We’re not parsing it now because we’re still telling people,” he said Wednesday.
However, he said the layoffs are “pretty balanced” between North Carolina, where Delhaize America is based, and Scarborough, though equity in layoffs wasn’t the company’s primary focus.
Delhaize America, which is owned by the Belgian-based Delhaize Group, is also leaving 150 corporate slots unfilled, for a total of 500 job cuts, Norton said.
The roughly 8,500 jobs at the 56 Hannaford grocery stores in Maine will not be affected, he said.
The layoffs are certainly disconcerting, said Tom Hall, Scarborough’s town manager.
“This is a matter of regional and state significance,” Hall said. “I don’t expect any immediate fiscal impact ... but to the extent this suggests more drastic changes in the future, that’s certainly a point of concern.”
Hall said the town would do what it could to help the displaced workers.
The layoffs are a sign that Delhaize America is a company in trouble, according to David Livingston, a Milwaukee-based supermarket analyst.
The recent layoffs come in the wake of other staffing changes at Delhaize and Hannaford, spurred on by a new chief executive of Delhaize America, Roland Smith. In December, Smith moved Beth Newlands Campbell from her position as president of Hannaford to be president of North Carolina-based Food Lion, Delhaize’s largest grocery store chain with roughly 1,000 stores. In Scarborough, Smith promoted Brad Wise to president of Hannaford.
Then, last month a leaked memo from Smith revealed that corporate leadership changes resulted in the elimination of 15 vice president positions, including six in Scarborough.
Livingston said Smith was brought on to manage Delhaize America through a major downsizing, which isn’t a good sign.
“You don’t downsize to prosperity,” Livingston said. “They’re going to decline, and they won’t be coming back.”
To be clear, Livingston separates Hannaford, which he called the company’s “flagship jewel,” from Delhaize America’s other grocery store chains, such as Food Lion and Sweetbay in Florida.
While Hannaford has been adding stores, the other chains have been shuttering some, Livingston said.
In fact, Livingston was in Florida on Wednesday, where Delhaize recently announced the closure of 33 Sweetbay stores and the laying off of 2,000.
“(Delhaize America) has been getting their clock cleaned by Wal-Mart on one hand and upscale stores on the other in about every market they’re in,” Livingston said.
While Livingston hasn’t been in a Hannaford store in the past 10 years, he said the other Delhaize stores are 20 to 30 years behind the times, calling them “1980s, plain vanilla” grocery stores.
The struggles of Delhaize America’s other grocery chains will likely hurt Hannaford, Livingston said.
“Hannaford stores were an extremely well-run company when Delhaize bought them, and now they’ve dumbed them down a bit to where they’re an average grocery store,” said Livingston, who said he was a consultant on Delhaize America’s acquisition of Hannaford in 2000. “They’re not failing, they don’t seem to be in major decline like the rest of the company is – but the thing is, they’re owned by a company that has a failing history.”
That failing history, Livingston said, will certainly have an impact on Hannaford going forward.
“These struggling (Delhaize) divisions could prevent Hannaford from putting capital back in the stores,” he said. “And, the thing is, you’re going to lose talent because your best employees will start looking for a job elsewhere. No one wants to work for a company in decline.”
Norton disputed Livingston on every count, saying the grocery store analyst “doesn’t know what he’s talking about.”
“Hannaford is better and stronger now than it was in 2000,” Norton said. “It’s represented in the store count, it’s represented in the profitability, in all those initiatives like Guiding Stars, sustainability and the LEED stores. ... With all due respect, he doesn’t understand the grocery store business in North Carolina and Maine. We’re going to win this marketplace.”
While acknowledging that Hannaford is a great grocery store, Norton also disagreed with Livingston that it’s Delhaize’s “flagship jewel.”
“Hannaford has performed well, but Food Lion has a bigger store count, a bigger opportunity to drive profitable growth for this company,” he said.
Norton said Smith, Delhaize America’s new CEO, has been forthright about the company’s need to become more competitive. That’s what the layoffs are all about, Norton said. They’re not a sign of a dying company.
“As difficult as these decisions are, it’s decisions like this that make this company stronger,” he said.