UPDATE 3-Delhaize cuts outlook, says consumer crisis not over

* Q2 oper profit 227 mln euros vs 259 mln forecast

* U.S. store sales down 3.6 pct

* Raises 2012 costs savings target to 500 mln euros

* Cuts forecast for operating profit growth

* Shares down 7.9 pct, biggest faller of top European stocks

(Adds CEO comments, U.S. and European economic outlook)

By Antonia van de Velde

BRUSSELS, Aug 13 (BestGrowthStock) – Belgian supermarket group
Delhaize (DELB.BR: ) on Friday cut it 2010 outlook, saying high
unemployment in its key market, the United States, meant a
consumer crisis has further to run.

The company also raised its 2012 cost savings target after
second-quarter trading in the United States proved tougher than

Chief Executive Pierre-Olivier Beckers said very high
unemployment in large areas of the group’s U.S. markets had
created an even more competitive environment, with customers
going from store to store to find the best deal.

“Those who say that the crisis is over certainly are wrong
when it comes to consumer goods,” Beckers told a news

The group, which makes about 70 percent of its sales in the
United States from chains such as Food Lion and Hannaford, also
cited continued price cuts and a lower-than-expected outlook on
U.S. inflation for its revised forecast.

At 1020 GMT, Delhaize shares were down 7.9 percent, the
biggest faller among leading European blue-chips (.FTEU3: )

Consumer spending is expected to remain subdued due to
continued high unemployment, although the risk of a double-dip
recession still remains relatively low in the United States, a
Reuters poll found. [ID:nLDE6790XK]

U.S. competitor Walmart (WMT.N: ) is due to report
second-quarter figures on Tuesday.

Delhaize’s like-for-like store sales in the United States
fell 3.6 percent in the second quarter, compared with an
expected 0.8 percent fall.

Bank Degroof analyst Ivan Lathouders said he would reduce
his full-year estimates to reflect lower sales growth and
margins, while KBC Securities analyst Pascale Weber cut Delhaize
from “accumulate” to “hold”.

Delhaize said it now expected 2010 operating profit growth
between minus 2 and plus 2 percent, against a previous forecast
for operating profit growth of 2 to 5 percent.

It also cut the number of new stores it had planned to open
this year to between 82 and 92 stores from between 102 and 122.

In addition to the 300 million euros in annual costs the
group was planning to cut out by 2012, it had identified another
200 million euros of savings, Delhaize said.

Delhaize first announced its plans to lower prices and
expand its budget stores in December.

Larger European rivals like France’s Carrefour (CARR.PA: ) and
Germany’s Metro (MEOG.DE: ) have also undertaken big cost cutting
programmes to combat sluggish consumer spending.

Dutch supermarket group Ahold (AHLN.AS: ), which makes 60
percent of its sales in the United States, reported a slightly
disappointing U.S. performance in the first quarter.
[ID:nLDE6510S2] Second-quarter figures are due on Aug. 26.


Delhaize’s second-quarter operating profit fell 7 percent to
227 million euros ($291.1 million), against an expected 259
million euros.

Delhaize reported strong sales in Belgium, reaching a
seven-year high in like-for-like store sales growth of 5
percent, against a forecast 3.8 percent.

The group attributed its strong performance in its home
market to good weather and said it had gained market share from
rivals Carrefour (CARR.PA: ) and discount retailers Colruyt
(COLR.BR: ), Aldi and Lidl. It had also benefited from strikes at
Carrefour Belgium, Beckers said.

But consumers could reign in spending in Belgium, which has
the third-highest debt to gross domestic product ratio (GDP) in
Europe and may face austerity measures once a new government is
formed following elections in June.

In Greece, the situation was worsening short term, but the
group said it was gaining market share there and was confident
for the mid to long term.
(Editing by Will Waterman and Erica Billingham)
($1=.7799 euro)

UPDATE 3-Delhaize cuts outlook, says consumer crisis not over