Dive Brief:

• Food Lion announced it is buying four Bi-Lo stores in South Carolina from Southeastern Grocers. Two stores are located in the greater Myrtle Beach area, while the others are in Florence and Columbia.
• The deal, which is for an undisclosed amount, is expected to close in late May. Until that time, the stores will remain under the Bi-Lo brand name.
• Food Lion announced that it will donate 60,000 meals to local food banks, and that each new store will pair with a local food bank to make weekly donations.

Dive Insight:

Food Lion’s expansion may seem modest, but it comes in a few key markets for the company, and at a time when many traditional grocers have curbed their growth. Myrtle Beach, a popular seaside destination that sees more than 18 million visitors each year, already supports several Food Lion stores.

The Ahold Delhaize-owned chain has performed well despite ongoing industry disruption. It’s extensive remodeling campaign — known as “Easy, Fresh and Affordable” — is now in its fourth year, and has touched around half of its roughly 1,000 stores. Each update costs around $1 million, and includes improved store design, more employees and an enhanced selection of fresh and local foods.

Food Lion is also working to keep its consumer-facing technology fresh. Its relatively new mobile app includes recipe and list builders, digital coupons and more. In February, Food Lion rolled out an enhancement to its MVP rewards program that doles out personalized offers.

Ahold Delhaize has called out Food Lion and its store updates in recent quarterly reports, and sources have told Food Dive the stores are performing better than expected in key regions. Lidl, for one, was expected to unsettle the chain, but the discounter’s misfires along with Food Lion’s strong performance have given the 60-year-old company a brighter outlook.

Still, food Lion has plenty of competition to worry about, from legacy players like Harris Teeter and Whole Foods to newcomers like Sprouts Farmers Market and Aldi. Food Lion offers home delivery through Instacart, with a recent expansion to new markets in North Carolina. The grocer has also been expanding its delivery service in Charlotte, where Walmart recently rolled out delivery through Postmates.

Meanwhile, Southeastern continues to sell off stores as part of its restructuring agreement. The company said last month it expects to pare down its chain to 580 locations, from around 700 pre-filing. It recently sold 15 Winn-Dixie stores to Brookshire Grocery Co., while the Food Lion deal comes as part of a plan to sell 19 Bi-Lo locations in South Carolina.

Southeastern plans to lower its debt levels by $500 million, and says it will use the interest payment savings to remodel around 100 stores a year. The remodels include much-needed additions like enhanced prepared foods, more natural and organic products and locally tailored assortments. But whether those changes will be enough to inject new life into the struggling company remains to be seen.