Frans Muller has been the CEO of Food Lion parent company Ahold Delhaize since July 2018. Prior to joining Ahold Delhaize, Muller served as Deputy Chief Executive Officer and Chief Integration Officer for KLM Cargo. He served in several management positions at the German retailer Metro AG before joining Delhaize Group in 2013.
Food Town
The chain of grocery stores, known as Food Lion, was founded in 1957 in Salisbury, North Carolina, as a spin-off of the Food Town chain. The chain quickly spread throughout the Carolinas and eventually was acquired by the Delhaize Group, a Belgian grocery company. It continued to expand and, by 1983, had opened hundreds of new stores. In the years since, the company has grown significantly. In fact, the chain is now one of the nation’s largest, employing over 63,000 people.
The idea of a Food Town store came about in 1967, when its founder, Ralph Ketner, decided to lock himself up in a motel room in Charlotte and analyze sales volumes. He determined that he could slash prices on about 3,000 items, thereby expanding its customer base. The strategy worked and the company was able to expand to seven stores by the end of the year. However, the company suffered during the early days, with sales of less than six million dollars the year before.
Early Years Growth
Food Town faced several challenges in the early years of its growth. Food Town was sued by the owner of another grocery chain in Virginia and was relegated to some locations. However, Food Town’s management team decided to continue to build the chain from within and began construction of smaller, more convenient stores. In 1974, Delhaize bought majority of the company’s shares, and in exchange for the majority of the company’s stock, agreed to vote with Ketner on all important policy decisions. By the end of the decade, Food Town had opened stores in Virginia and Georgia.
The company’s community reaches far beyond the grocery industry. It supports several local institutions, including Rowan Regional Medical Center and Catawba College. In fact, the Smith family foundation contributed millions of dollars to the Rowan Regional Medical Center’s capital campaign. The company has also contributed millions of dollars to the capital campaign of Catawba College. For those who aren’t aware of its involvement in the community, the Food Lion brand name is a testament to its commitment to the community.
Group of Community Members
While the company’s success can be attributed to its commitment to the community, its roots are modest. The company was founded by a group of community members. Ralph W. Ketner, a grocer from Faith, bought 50 shares of the company’s stock. His wife didn’t understand the stocks and assumed Ketner was lending money. The first Food Town store opened its doors on December 12, 1957. A price war ensued for a year, as rival Winn-Dixie attempted to put Food Town out of business.
Food Town was eventually sold to the grocery chain Food Lion. The chain soon became the fastest growing grocery chain in the country, and the Ketner brothers became millionaires. Both Brown and Wilson Smith died in 1994. Ralph Ketner became the community’s greatest philanthropist. But the name has a darker side. The company’s early years were not without its challenges. Its heyday was short lived. The company eventually expanded to a nationwide network of 109 stores.
While Food Lion was once a regional grocery store, it began to retreat to the East Coast due to increased competition. This included newcomers such as Harris Teeter and Publix, as well as national chains such as Kroger, Target, and Wal-Mart. And the chain’s omnipresence forced it to reduce its presence in major markets such as Atlanta, North and South Carolina, and Florida. Food Lion had to adjust to these changes.
Organic and Natural Foods
In addition to expanding its menu, Food Lion has expanded its selection of organic and natural foods. It also has expanded its selection of limited-reserve wines and local craft beer. It also has a new food rescue program, in which nonprofit organizations will regularly pick up surplus food from the Mallard Creek store. Its mission is to feed people in need. These initiatives are a way of the company showing its commitment to the community. They also give back to the community in other ways, too.
In terms of sustainability, Food Lion is committed to reducing its carbon footprint. The company’s stores have been awarded Energy Star Partner of the Year for 20 consecutive years. Moreover, the company is committed to reducing its food waste by 50% by 2030. Additionally, the company’s food rescue program is part of its corporate social responsibility efforts. Food Lion has donated nearly 300 million meals to those in need through its food rescue program. Its stores participate in food rescue programs in their local communities to help the needy.
Despite these efforts, Food Lion’s margins dropped by 2.1 percent in 1993. Moreover, the company took a $170.5 million charge to close 88 underperforming stores in the Texas and Oklahoma markets. Consumers United with Employees, a union that has connections to the company’s employees, accused Food Lion of a “chronic problem” of selling products that were out of date. In response to these claims, Food Lion pointed to a U.S. Food and Drug Administration inspection as the cause.
In August, the third Food Lion lot was purchased. Its homes backed up to a large forested area. Moreover, the neighborhood surrounding the property was undeveloped, and the intersection between the two had been recently completed. As a result, residents were vocal about their opposition to the new Food Lion, complaining about the displacement of animals and an empty AppleTree. Despite these protests, the developer of the store is continuing construction.
Hidden Camera Segment
ABC News also aired a hidden camera segment that documented unsanitary conditions in a Food Lion store. ABC’s producers had obtained jobs at the Food Lion and witnessed employees re-dating expired products and using bleach to mask bad smells. This scandal slowed down the chain’s rapid expansion. Food Lion sued ABC for the footage and also claimed that the producers coerced other employees to film the stores. The company was awarded $5.5 million in damages and faced accusations of child labor laws.
In late 2013, Food Lion introduced a new design. It introduced coolers in produce sections to keep certain products fresher. This new design was soon followed by the introduction of the Food Lion logo. In May 2014, Food Lion began rebranding all of its 76 locations in Greenville and Wilmington, North Carolina. In March 2015, the chain announced plans to remodel the Raleigh market. The work was expected to be completed between April and October 2015.
The company has since settled FLSA claims related to the minimum wage and overtime compensation of its employees. In 1993, Food Lion agreed to pay $16.2 million, a record amount for a private employer. The settlement made Food Lion commit to upholding its employee rights in the future. The company also promised not to retaliate against workers. Despite the legal issues, the chain’s store count has increased, but at a much slower pace than it did in the 1980s.
While Food Lion continues to grow, the company is now struggling to enter new markets. The chain’s sales in Texas were not as strong as they had been in the past. The company lost money in the process, but remained profitable in the long run. With the help of its franchisees, Food Lion has become the third largest chain in the U.S. and is a major player in the grocery industry. Its recent struggles are due to the fact that Food Lion has had trouble adapting to the new market in Texas.
