One year after he took office as Colruyt Group CEO, Stefan Goethaert shows his ambition: a 30 % market share is not the limit, he says. However, the market leader is impacted by the introduction of Sunday openings in Delhaize‘s franchised stores.
Three conclusions
Three Belgian newspapers published an extensive interview with the Colruyt CEO last weekend: De Tijd, Het Laatste Nieuws and La Libre Belgique. The retailer leaves no doubt about continuing its low-price strategy, but does complain about the high labour costs and taxes that make Belgian consumers shop across the border. Moreover, the CEO admits that the recent introduction of a new promotion strategy mainly has to do with the psychological power of the word “free”.
Goethaert also indicates that he is concerned about the future of Belgian agriculture, and that Colruyt Group is increasingly betting on artificial intelligence to become more cost-efficient. RetailDetail took the interviews apart, and distilled the following three conclusions.
1. Integrating Match and Smatch stores takes time
The integration of the 54 Match and Smatch shops – the largest acquisition ever for Colruyt Group – will take another two to three years. 39 shops under the provisional CoMarkt/CoMarché brand will be included in the different chains belonging to the group. “In the small former Smatch stores, business is going very well. At some larger Match shops, things are going a bit more complex – as expected. Quite a few of them measure 3,000 sqm. We are not used to that. We will probably subdivide a number of premises to accommodate other shops”, he told De Tijd.
In addition, the retailer continues to open new shops, especially in cities. “People sometimes say that our current market share of 30 % is the maximum, but why? Examples abroad show that more is possible.”
2. Sunday openings are possible
Last year, Colruyt – like Carrefour – was able to benefit from the strikes at competitor Delhaize, but the latter has finished its franchising operation and now more and more branches open on Sundays. “We have to be honest: we are feeling the consequences“, Goethaert admitted to HLN. “There are customers who would normally come to us, but now go to the competition on Sundays. We do not rule out following that example, but it is too early to decide.”
There are already some Spar and Colruyt supermarkets that open on Sundays (including in tourist locations), but the CEO says that Sunday openings have to bring in extra revenue: “If everyone is open on Sundays, people are not going to buy more. In that case, the only thing that the sector has achieved is the same revenue with higher costs.” In La Libre, the CEO says he also wants to explore other avenues: for instance, making it more attractive to come and shop on weekdays. Home delivery is also attracting new customers.
Colruyt Group also repeats its plea to do something about the wage differences between supermarkets operated by chains and franchised shops – especially if the franchisers operate more than ten shops.
3. Health becomes major growth area
Especially since the pandemic, health is a growth market for the Belgian retailer. Health advice via digital platforms connects the retailer’s shops, fitness centres and online pharmacies. “A lot of Newpharma’s products are already in the Colruyt and OKay shops, but more collaboration is possible there. We also have two physical pharmacies – that is sometimes overlooked. Importantly, Newpharma is also gaining ground abroad, especially in France, Switzerland and the Netherlands”, the CEO told De Tijd.
Goethaert stresses the importance of preventive healthcare: “The cost of our healthcare needs to be kept under control. That is a big challenge for the next government, and we can help with that.”
