International News - Delhaize eyes Germany with supermarket debut

Belgian food retailer Delhaize is to open its first German supermarket next year.

Delhaize has a global presence, including stores in the US, Eastern Europe and Asia. However, Germany will be only its second market in Western Europe.

A spokesman for the EUR20 billion (£12.64 billion) turnover company confirmed that the first shop will open in Aachen next year and will be followed by a convenience store in September. But he would not give further details ahead of the retailer's third-quarter update on Thursday.

M+M Planet Retail analyst Bryan Roberts said the first shop will open near the Belgian border and therefore benefit from proximity to Delhaize's existing infrastructure.

But he added: 'One struggles to see the benefit for Delhaize to have a store in Germany or for German shoppers to have access to one.'

Delhaize will face two main difficulties, he believes. As a 'quality' food retailer, there might be problems due to the essentially discount-driven German market.

Second, Delhaize might face similar problems to Wal-Mart, which has had trouble gaining a foothold in Germany against the background of a poorly performing economy.

'In terms of European retail sectors, Germany - along with Switzerland - continues to be the toughest,' he added.

In September, Delhaize revealed that comparable sales in the US this year will be negative because of tough trading and competition. It said its Hannaford stores had traded as expected, but the Food Lion and Kash n' Karry fascias had been hit badly.