Dutch retailer Jumbo is suffering from an eventful year: its home market share is stagnating and sales grew by only 3.2 %, despite an inflation of more than 10 %. Figures for Belgium are even more worrying.
Stagnation
It should have been a great triumph: for the first time ever, Jumbo crosses the milestone of ten billion euro in sales. However, 2022 was not great for the Dutch supermarket group: growth of 3.2 % was slightly higher than the market (3 %), but it was also significantly below the level of inflation. Supermarket chains everywhere are finding it difficult to pass on the hugely increased costs to consumers, as market leader Colruyt in Belgium also proved.
The eponymous supermarket chain achieved a 22 % market share in the Netherlands in 2022, which is almost the same as a year earlier. Restaurant formula La Place achieved 107 million euro turnover, which is “back in the direction” of the pre-Covid years, but still below that level. Online there was 4.5 % growth, but in that area the chain was overtaken by Albert Heijn and Picnic. Indeed, not Jumbo, but Picnic is today the second largest web supermarket in the Netherlands.
The Dutch supermarket group points to an “exceptional and eventful year” that the family business has experienced. By this, it refers not only to the high inflation and difficult economic conditions, but also to the internal blows the Van Eerd family had to deal with. Founder Karel van Eerd died last month at the age of 84, while the arrest and subsequent resignation of general manager Frits van Eerd “had a great impact on the Jumbo organisation”.
Belgium battleground
The future looks problematic as well: “While Albert Heijn managed two great acquisitions last year, Jumbo is no longer growing in the Netherlands”, RetailDetail founder Jorg Snoeck observes. “In 2023, they only want to open three shops in the Netherlands, while they already closed two in 2022. In Belgium, they are still only going for ten openings a year, while the plan used to be fifteen shops a year. This is also necessary to achieve profitable scale.”
More to the point, Jumbo is importing problems. “The only ‘growth’ comes from Belgium, but that is a huge battleground. Due to the limited scale, the Belgian branch is still loss-making, while staff costs, energy costs and rental costs there are higher than in the Netherlands. It will take at least another two to three years before Jumbo can turn a profit in Belgium, in the meantime profitability remains very heavily under pressure.”
Since there is no growth in the Netherlands, Jumbo cannot make up for the Belgian losses. On the contrary, replacement CEO Ton van Veen himself admits that margins are smaller in these times. Catching up online also still requires a lot of investment and La Place is just a drop in the ocean. Ton van Veen nevertheless says he will continue on a “steady course” and swallow the “insurmountable” extra costs for the time being.
