Jumbo profit suffers from ailing Belgian expansion

Dutch retailer Jumbo has posted disappointing results, as it suffers from rising costs due to inflation and start-up losses in Belgium. Rising prices pushed down customer satisfaction, the company’s annual report shows.

Declining profit

Jumbo did manage record sales of almost 10.3 billion euros in 2022 (including restaurant chain La Place), but its operating profit (ebitda) went down 5 % to 659 million euros. Net profit after tax fell from 114 to 80 million euros. The 27 Belgian shops accounted for consumer sales of 216 million euros last year, the Dutch supermarket chain reports in its 2022 annual report.

Commenting on the figures, Jumbo referred to challenging market conditions, rising costs due to inflation and start-up losses in Belgium. The ongoing investigation into former CEO Frits van Eerd also brought about additional costs.

Customer satisfaction down

Analysts have long questioned Jumbo’s expansion plans in the particularly competitive Belgian market, where margins are under severe pressure at all food retailers. Costs for wages and real estate, among other things, are much higher than initially budgeted and not all shops achieve the envisaged turnover. At the same time, the supermarket chain is facing major challenges in its home market, where market leader Albert Heijn is further expanding its lead.

In that home market, customers also appear less satisfied with Jumbo’s value for money: the satisfaction score fell from 69 % in 2021 to 63 % in 2022, while the supermarket chain was aiming for a score of 72 %. By 2025, the retailer even wants to reach 77 %. The decline is largely due to the effects of high inflation, Jumbo says, and it applies to the entire supermarket sector. “Sustained investments in the quality of Jumbo private label products have not been able to prevent this.”