Delhaize CEO Tells Wal-Mart 'Bring It On'

Pierre-Olivier Beckers, the 42-year old CEO of Delhaize Freres et Compagnie-Le Lion, must prove that he is tough enough to fight off attacks from two of the world's biggest retailers, Carrefour SA and Wal-Mart Stores Inc. The French giant bought GB, a fading Belgian retailer, two years ago, and Wal-Mart is invading Delhaize's Food Lion subsidiary's territory in the southeast U.S., reports The Wall Street Journal.

"We must avoid a price war and compete instead on quality and service," says Mr. Beckers, a descendent of the family that founded Belgium's largest grocer 135 years ago. His strategy hinges on developing smaller, neighborhood stores as alternatives to the competitor's giant outlets. Eventually, he says it may require acquiring another big supermarket chain, particularly in Western Europe. That might mean diluting the Beckers family's control, which he says he is willing to contemplate.

Mr. Beckers is banking on a philosophy of "Every Day Fair Prices." Despite some across the board cuts, these prices will still be three to five percent higher than discount giants. However, he believes that customers will pay the difference for quality own-label and ready-made meals.

"The name of the game is new ideas, perishables, organic products, ready meal solutions," he says.

Moderator Comment: Can Delhaize compete head-to-head with Wal-Mart in the United States?

We found it interesting that Mr. Beckers said, "We must avoid a price war and compete instead on quality and service." Food Lion's marketing strategy was (is) about offering the lowest prices. If the chain loses that battle then prospects for the war with Wal-Mart are not good. [George Anderson - Moderator]

• Delhaize Can Beat Wal-Mart, Carrefour - CEO - The Wall Street Journal (subscription required)