- Food Lion plans to update 105 stores in the Norfolk, Virginia market this year as part of its "Easy, Fresh and Affordable" brand refresh. The $168 million investment will include store remodels, price investments, an expanded product assortment and an estimated 5,000 new employees. Over the past four years, Food Lion has remodeled 544 of its more than 1,000 stores in 10 states. With its Norfolk plan, about 65% of the Food Lion system will be updated.
- The stores, which will maintain normal operating hours during the remodeling process, will be designed to make shopping faster and easier for customers. Employees are also undergoing training for “enhanced” customer service, according to a company press release.
- Also as part of the remodel, Food Lion plans to expand its local, natural, organic and gluten-free items. Twelve of the stores will feature walk-in garden coolers aimed to keep producer fresher longer, while six stores will include expanded delis with items such as handmade pizza, wing bar, coffee and soda stations.
Food Lion’s hefty investment in its “Easy, Fresh and Affordable” initiative hits on a number of consumer trends, including rising demand for local, natural, organic and gluten-free food. Making its stores easier to navigate, its pricing affordable and hiring more employees to focus on customer service are also important moves to compete in an increasingly competitive industry.
The East Coast markets where the chain operates are plenty crowded. Aldi, Walmart, Kroger and Trader Joe’s have expanded in the region, while Whole Foods remains a surging threat under Amazon's ownership. Lidl hasn't been the threat many envisioned it would be, but the discounter is determined to improve its fortunes in the U.S. — and has the resources to do so.
Though pricey – each store remodel costs more than $1 million, according to Food Lion – a brand refresh is necessary both to maintain relevancy and stand out in the crowd. Food Lion's roots go deep in many of the communities it serves, but consumer loyalty remains fickle against the low pricing, fresh assortment and growing online options competitors are offering.
Remodels in general have been known to show positive returns. Target, for example, recently reported its remodels have driven sales gains of 2 to 4%. Research from Monash University found that retail store remodels drive sales gains — particularly with new customers. Between 30 and 80% of revenue growth comes from new customers, the researchers found, which is exactly what brands in this crowded market are jockeying for.
One challenge Food Lion will have to overcome is trying to be everything to everyone. “I’m very concerned because they have yet to define a real brand image for themselves,” Elley Symmes, retail analyst with Kantar Retail recently told Food Dive.
Indeed, there are a number of points to digest within Food Lion’s remodel initiative – customer service, pricing, store design, expanded produce and deli, soda stations, wing bars, organic, gluten-free, so on and so forth. The chain will need to execute on all points if it is to maintain an edge in a very busy region.