President, chief executive officer, and director, Delhaize Group; chairman and chief executive officer, Delhaize America
Education: I.A.G, Univerite catholique de Louvain, bachelor's degree; Harvard Business School, MBA.
Career: Delhaize Group, 1983–1996, began as U.S. operations group store manager, became director of purchasing and executive committee member; 1996–, executive vice president of executive committee in charge of international activities; 1999–, president and chief executive officer; Delhaize America, 1999–2002, chairman; 2002–, chairman and chief executive officer; CIES–The Food Business Forum, 2002–2004, chairman; Food Marketing Institute, director.
Awards: Manager of the Year, Trends/Tendances magazine, 2000.
Address: Delhaize Group, rue Osseghemstraat 53, Molenbeek-St.-Jean, B-1080 Brussells, Belgium; http://www.delhaizegroup.com/en.
■ A Belgian native who earned his master's degree in the United States, Pierre-Olivier Beckers simultaneously held the top executive positions with the Delhaize Group, the Belgian-based, international owner and operator of food retail stores, and the group's U.S. subsidiary, Delhaize America. In 2002 he was elected to a two-year term as chairman of the Paris-based CIES–The Food Business Forum, an international network interfacing with more than four hundred food retailers and suppliers from 50 countries.
Beckers began his lifelong food-industry career in Belgium in 1982 as a store manager for a bakery chain. He joined Delhaize Group in 1983 and spent the next three years in the
United States running the company's U.S. operations. After his return to Belgium, Beckers gained considerable experience as a buyer before becoming director of nonperishables purchasing. By 1999 his hands-on experience in several of the corporation's operational areas had earned him the position of chief executive officer of the entire Delhaize Group. Beckers thus held jurisdiction over seven hundred retail stores in Belgium and more than 2,500 stores functioning under more than 20 separate identities in nine countries throughout Europe and Asia and in the United States. He was elected chairman of the board at Delhaize America in 1999 and was then elected CEO in 2002.
In Belgium, Delhaize—"Le Lion"—operated stores under banners such as AD Delhaize, Delhaize Di (health and beauty products), Tom & Company (pet products), and Proxy (convenience stores). In the United States, Delhaize America operated approximately 1,485 supermarkets under the banners Food Lion (1,225 stores in 11 Southeast and Mid-Atlantic states), Hannaford (114 stores in New England), and Kash n' Karry (138 stores in Florida).
In April 1999 U.S. native Bill McCanless, the then CEO of Delhaize America, was named president and CEO of Food Lion, Delhaize's chain of budget food stores. At the same time, Beckers was named Food Lion's chairman. Rose Post of the Salisbury Post quoted Laura Kendall, Food Lion's chief financial officer, as commenting, "Delhaize views Food Lion as its growth opportunity in the United States, and with Pierre in the chairman's slot they will be able to work with Bill in focusing on strategies such as acquisitions of stores and driving sales momentum" (April 8, 1999).
As chairman of Delhaize America, Beckers was strategically positioned to help navigate Food Lion into a greater market share of the U.S. food retail-store industry. Beckers told shareholders that Food Lion was a vitally important component of Delhaize's global growth strategy and that Delhaize intended to create new areas of development for the Food Lion chain, implying that the company would look into acquisitions if appropriate targets became available.
A year after Beckers's appointment, Food Lion's acquisition of Hannaford, an upmarket food chain in New England, was imminent. Not all Food Lion shareholders were happy about the prospect, however. In a special report to the Salisbury Post , Ralph Ketner, the 1957 cofounder of Food Lion, expressed his dissatisfaction with the direction in which Delhaize's senior executives were taking his company. The annual stockholders meeting, held in Salisbury, North Carolina, ever since the late 1950s, had been moved to Tampa, Florida, and the Delhaize board chose not to allow cumulative shareholder voting, thus denying 44 percent of class B stockholders input into business decisions. Ketner called Food Lion's planned merger with Hannaford a disaster because Delhaize offered roughly $1 billion too much for the company. (Hannaford's shares were trading at $63, and Delhaize offered $79.) He also cited other huge outlays, such as $2.5 billion in goodwill, and the fact that Food Lion would need to borrow $3 billion at 7.8 percent to complete the deal, which meant $234 million annually in interest alone. "Can Food Lion afford or justify this?" he wrote. "From my detailed studies of their projections, absolutely not! And obviously, Wall Street investors also think 'not,' as the stock has plunged from $12 to $6 just since Delhaize's announcement" (April 17, 2000).
Ketner was also distressed at what he considered Delhaize's freedom with Food Lion stocks and Beckers's lack of responsiveness to shareholders. He noted that McCanless received 200,000 shares in Food Lion, pointing out that such stock options were usually given as a hiring incentive or for outstanding performance, neither of which, he said, was applicable in that instance. McCanless had been on board for twelve months, and stock values had plummeted. Ketner wrote, "Almost daily, I am asked by stockholders and employees, 'What is happening to our company?!' I have repeatedly written to Pierre Beckers, but have received no satisfactory answer. It seems to many of us that Delhaize is interested only in mergers and acquisitions and not in 'minding the store'" (April 17, 2000).
Regardless, with Beckers as Food Lion's chairman, merger plans went ahead, and Hannaford was acquired in 2000. Beckers's reasoning behind the acquisition grew out of Delhaize's unsuccessful attempt in the early 1980s to take Food Lion into noncontiguous states when they opened a store in Texas that ultimately failed. Beckers was quoted by David Orgel in Supermarket News as commenting, "We came out with the realization that it was not going to be easy to take Food Lion into every state across the U.S." (December 8, 2003). Learning from the failure, Beckers saw acquisition as the most favorable way to open up growth opportunities for Food Lion in new geographic regions.
Beckers believed that a common vision needed to be maintained for acquisitions to succeed. Toward that end, he kept Hannaford's management team intact. "Success begins with human resources," he told David Ghitelman in an interview with Supermarket News . "If you keep that in mind, the rest falls into place. When acquisitions fail, it's usually due to a lack of communication. We're past that. We've known each other a very long time" (April 30, 2001).
While the acquisition of Hannaford succeeded, Food Lion's revenues slumped. By 2002 the chain's sales lagged amid a general industry downturn. McCanless was removed from his role as CEO of Delhaize America to become vice chairman, and Beckers stepped into the role of chief executive because of his extensive operations experience. "For me, with 75 percent of our operations in the U.S., it is very important that I focus much of my energy and time on this part of the operations," Beckers told Mark Hamstra in an interview with Supermarket News . "It was really the next logical step for Delhaize in terms of streamlining the organization" (November 11, 2002). Although the executive restructuring occurred during a low ebb in Food Lion's performance, Becker insisted the transition had been planned two years earlier and was not due to short-term pressure.
In his attempt to increase Food Lion's visibility and market share, Beckers readily entertained new ideas. Drawing on his company's experience in Belgium and Europe, he took a multi–pronged approach to reviving Food Lion's performance. While retaining their low-price reputation, revitalization plans included redesigning stores, increasing convenience and levels of customer service, and bolstering Food Lion's fresh-food image, as heightened consumer awareness of health and nutrition had shifted demand toward more variety and better quality.
Analysts saw Beckers's focus on convenience and customer service as perhaps the most significant aspect of Food Lion's growth strategy. Beckers noted to Hamstra that the chain had more than 1,200 stores in the states in which they operated, and thus there was a "Food Lion near your home in just about every area" (November 11, 2002). Developing the convenience model even further, the company experimented with building smaller stores with the same array of products in several underserved communities. Beckers also felt that in-store convenience needed to be improved. One tactic used to address this issue was to place self-serve items, such as deli products, in the front of the store for easy customer access. Beckers believed that increased customer service and convenience made Food Lion a major competitor of the mammoth American retailer Wal-Mart: "I know there's this feeling out there that Wal-Mart is the 800-pound gorilla that takes market share away for all retailers. But we experience every time we open a new store next to Wal-Mart that we are taking sales away from that competition," he told Hamstra (November 11, 2002).
Unlike the often sudden and daring business moves made by many U.S. enterprises, Delhaize maintained a slow and steady approach, a philosophy that Beckers believed was the most favorable method of integrating acquisitions in the United States. While realizing that U.S. investors often sought the more exciting approach, Beckers believed that exciting consumers was far more important, and building relationships between employees and consumers was a major part of the process.
In March 2003, however, still struggling amid the general economic downturn, 41 Food Lion stores were closed; meanwhile Hannaford, the more upmarket chain, continued to fair well. Early in 2004, primarily due to the weakness of the dollar against the euro, the Delhaize Group closed 34 Florida-based Kash n' Karry stores and was nearing the end of a restructuring phase that closed several stores and initiated the sale of certain other interests internationally. The restructure included the sale of Delhaize's 49 percent stake in the Singapore retailer Shop N Save. Beckers pointed out that in contrast to the image Delhaize portrayed as a result of these bail-out transactions, the company met its 2003 indebtedness and cash-flow targets. "We had announced the creation of one billion dollars of free cash flow and of an indebtedness ration of 100 percent to equity capital in 2003, and we are in line with these objectives," he told a reporter for the Belgian daily newspaper L'Echo (January 31, 2004).
In 2000 Beckers received a prestigious distinction when Belgium's leading business magazine named him Manager of the Year. In 2002 he was elected chairman of CIES–The Food Business Forum, the independent, Paris-based, global association established in the mid-1900s as a liaison between food marketing industries and grocery manufacturers in more than 50 countries. When Beckers became chairman, company membership in the association included two-thirds of the world's largest food retailers and their suppliers as well as smaller companies from developing nations. At the age of 42, Beckers was the youngest person ever to be named CIES chairman.
See also entries on Delhaize "Le Lion" S.A. and Food Lion, Inc. in International Directory of Company Histories .
CIES–The Food Business Forum, "Pierre-Olivier Beckers, CEO of Delhaize Group: New Chairman of CIES–The Food Business Forum," press release, June 20, 2002, www.ciesnet.com/pdf/presse/po_beckers_new_cies_chairman.pdf .
"Delhaize Nearing End of Restructuring Phase," Forbes.com , January 31, 2004, http://forbes.com/reuters/newswire/2004/01/31/rtr1237040.html .
Ghitelman, David, "All Together Now," Supermarket News , April 30, 2001, p. 1.
Hamstra, Mark, "Making Food Lion Roar," Supermarket News , November 11, 2002, p. 10.
Ketner, Ralph, "What Is the Future of Food Lion? Board Representation, Merger Are among Cofounder's Concerns," Salisbury Post , April 17, 2000, http://www.salisburypost.com/2000april/041700g.htm .
Orgel, David, "Four Key Lessons Delhaize Group Learned in America," Supermarket News , December 8, 2003, p. 8.
Post, Rose, "McCanless President, CEO; Beckers Chairman of Board," Salisbury Post , April 8, 1999. http://www.salisburypost.com/newscopy/040899lion_1.htm .
—Marie L. Thompson