Dive Brief:

• Food Lion has finished remodeling 93 stores in North Carolina’s Triad market, which includes the cities of Winston-Salem and Greensboro, according to the Winston-Salem Journal. The retailer also introduced a new mobile app that ties in with its MVP loyalty program and offers coupons, a shopping list builder and other features.
• The fresh-focused updates, which began last October and cost the company $178 million, include improved lighting; additional employees; an expanded selection of local, organic and grab-and-go items; a walk-in produce selection; and an increased assortment of the company’s Nature’s Place all-natural private label products. 
• The Triad is the fifth market to receive store updates since Food Lion began its companywide remodeling project in 2014. So far, the retailer has updated 473 of its 1,000 stores.

Dive Insight:

Food Lion’s remodels are costing the company more than $1 million per store. Added up across the retailer’s 1,000-store footprint, it’s clear this is a very expensive endeavor.

But it’s a necessary move for a legacy conventional retailer in a hotly contested market. Recent years have seen strong operators like Aldi, Walmart, Kroger and Trader Joe’s expand in the region. Now, discounter Lidl along with shopper-favorites Publix and Wegmans are moving in. Food Lion’s East Coast roots reach back almost 60 years, but history and tradition alone don’t stand a chance against lower prices, better selection and a better overall shopping experience.

With so many operators in the Mid-Atlantic region nowadays, stores need to have clear value messages and points of differentiation. Food Lion’s updates include a few distinguishing features, including walk-in produce departments set to 58 degrees — “cold but not too cold,” as one customer told the Winston-Salem Journal. Stores also feature additional employees and a beefed-up private label selection that offers fresh values on meat, prepared foods, produce and bakery products.

However, the remodels also add in a lot of elements that simply bring Food Lion up to speed on consumer preferences — including more local products, organics and prepared foods. According to sources interviewed by Food Dive, these steps, while helpful, may not be enough to gain and retain customers against high-performing competitors.

“I’m very concerned for Food Lion from the Lidl perspective,” Elley Symmes, retail analyst with Kantar Retail, told Food Dive recently. “I’m very concerned because they have yet to define a real brand image for themselves. They try to be everything to everyone.”

Parent company Ahold Delhaize, on the other hand, has singled out Food Lion in recent earnings reports, noting store sales are increasing with its remodels. As the updates continue and additional retailers move in on Food Lion’s turf, Ahold Delhaize will hope those increases can continue.