Colruyt remains the cheapest supermarket in Belgium. The duel against Albert Heijn causes prices to drop further in Flanders. Carrefour opts for a remarkable multi-track policy in its price strategy.
Duel
The Flemish Colruyt stores were 11,1 per cent cheaper than the market average in the first quarter of this year, according to a new price comparison by Daltix. Albert Heijn follows closely behind with prices 10,5 per cent below the market average. In Brussels and Wallonia, Colruyt’s prices are slightly higher, although the chain remains the cheapest in these regions as well. The differences have everything to do with the rivalry between Colruyt and Albert Heijn in Flanders, the northern part of the country: since October 2020, the market leader in the whole of Flanders aligns its prices with those of Albert Heijn. In the French-speaking part of the country, Colruyt is not competing with the Dutch rival.
The price war is a duel: the gap between the two price leaders and the other supermarket chains is considerably big. Only the Carrefour hypermarkets are clinging on: they position themselves between the price fighters on the one hand and the other supermarket chains on the other, and thus determine the average market price, as it were. The Carrefour Market stores are 4.6 per cent more expensive (the branches operated by Mestdagh are slightly cheaper), and Delhaize is 5.1 per cent more expensive. The most expensive supermarkets are Match, Carrefour Express and Smatch.
Differentiated price policy
However, national averages don’t tell the whole story. With its Market supermarkets, Carrefour pursues a remarkable differentiated price policy. It is noticeable when we take a closer look at Brussels: since the first lockdown, Carrefour Market has been as expensive as the Carrefour Express convenience stores. The supermarket chain raised its prices in the Belgian capital sharply in March last year, when the Covid pandemic hit. Since then, they have kept them at the same level.
Perhaps the lockdown was an opportunity for Carrefour to find out whether consumers would accept such a price increase or not. The answer to that question appears to be affirmative: prices did not fall since. While the hypermarkets guard the price image of Carrefour among the price-sensitive customer and therefore did not raise prices, the retailer is looking for the upper limits of the price that consumers are willing to pay for convenience in the city in its supermarkets and convenience stores. This strategy seems successful: Carrefour has been gaining market share for several quarters in a row.
Price developments
Other supermarket chains also raised prices during the first lockdown, but not necessarily to the same extent. And some chains also lowered their prices again. That becomes clear when we analyse the price movements within each chain. For example, at Colruyt in Flanders, prices rose slightly in March last year – a logical consequence of the chain’s price-following strategy – but fell significantly since the fourth quarter of 2020, when the market leader intensified its price competition with Albert Heijn.
At Delhaize, prices remained relatively stable in 2020 but increased in the first quarter of 2021. This is again a familiar plot: the retailer is usually the first to implement price changes after completing its annual negotiations with its suppliers. At Albert Heijn, prices rose by only 0.8 per cent since Q1 2020: the challenger continues to keep the pressure high. At Aldi, prices increased by 1.1 per cent, and at Carrefour Hyper they decreased. Match and more so Smatch, like Carrefour Market and Express, did take advantage of the lockdown by significantly increasing prices and keeping them high. Price competition on the Belgian market is, therefore, anything but straightforward.
Quarterly updates
From now on, Daltix and RetailDetail will publish quarterly updates on the evolution of supermarket prices in Belgium. The comparison will cover a basket of products widely available from the various supermarket chains on the Belgian market, i.e. mainly branded products. Daltix compares the price level for each product with the market average for that product. For the time being, hard discounters Aldi and Lidl are not included in the comparison. In the upcoming publications, however, we will add new players and products to the analysis.
Price comparison on a national level – Q1 2021
Price comparison Brussels – Q1 2021
Price developments since the first lockdown
