Food Lion Rethinks Move Into Southwest

Food Lion Inc. said Thursday it will close 61 stores in Louisiana, Oklahoma and Texas and lay off 3,100 employees in a reversal of its much second-guessed decision to expand from its Southeast base into the Southwest.

The company is also closing a Texas distribution center as part of the cutbacks, which will reduce its overall employment by just more than 4 percent.

Food Lion has blamed its failure to gain a foothold in the Southwest on a damaging hidden-camera expose by ABC’s “PrimeTime Live” show in November 1992.

The grocery chain also reported Thursday that its third-quarter earnings plunged to $1.2 million from $50 million in the same period last year because of costs to pay for the closings and layoffs.

Food Lion employs more than 75,000 workers at 1,058 stores in 11 states and 91 Kash n’ Karry stores in Florida.