In the difficult Belgian market, Delhaize is struggling to grow but manages to increase its market share. Ahold Delhaize CEO Frans Muller has reservations about the increasing competition, saying “This can not go on.”
Impact of Jumbo remains limited
In the fourth quarter Delhaize raised its market share despite stagnating sales. Albert Heijn, also belonging to the Ahold Delhaize group, grew even faster, Muller told Belgian newspaper De Standaard. Given the circumstances, Muller is rather pleased with his chains’ performance: “The Belgian market is difficult due to the market no longer growing and low inflation. There are too many square meters of retail surface now, and more space continues to be added. In short, it is a difficult market with a lot of competition, while new players are entering the market. And yet, as you see, we have gained market share over the whole year.”
According to the CEO, the situation in the Belgian market is unsustainable: “I think some of the players, including the regional retailers, are having a pretty hard time. This can not go on forever.” However, the impact of newcomer (and arch rival) Jumbo, with its current total of just three supermarkets, remains limited for the time being. Delhaize is not feeling it at all, but Albert Heijn is impacted somewhat more because its shops are closer to Jumbo’s.
As far as Muller is concerned, 2020 must be a year of faster growth. The price perception at Delhaize has improved, the 1+1 promotions are working, the Nutri-score food label is receiving positive reactions and the new store concept Fresh Atelier is doing well. There are still steps to be taken with regard to supply and online. Cost savings should bring Delhaize’s margin back to around 3.7 % to 3.9 %.
