Belgian market leader Colruyt Group has very lofty ambitions with its new Okay City concept, which should have 100 locations in eight years’ time. The city stores will function as trial stores as well, so that successful tests can be expanded to the retailer’s other, larger store concepts.
Focus on cities
While Colruyt Group has a market share of more than 30 % in the whole of Belgium, its market share in major cities is only 20 %. The retailer wants to remedy this quickly, especially as “the whole of Belgium is urbanising”. The growth potential is huge, director Christophe Dehandschutter told RetailDetail. “With our most important brand ‘Colruyt’, we historically grew mainly outside city centres. In the cities, we have to focus on attracting younger customers.”
Okay City rises from the ashes of the ten-year-old concept Okay Compact. “The new concept illustrates a new way of thinking at Colruyt Group: at the time, we launched Okay as a smaller version of the big Colruyt shops, and Okay Compact as a smaller Okay. Now we are turning things around: with Okay City, we adapt to the city customer. That experience should then also flow back to our larger concepts.”
‘On the go’ for urban customers
Okay City shops sell a range of 3,000 items in stores measuring 300 to 400 sqm. They do not have the same range and promotions as the more rural, larger Okay supermarkets do. In city stores, fresh and ‘on the go’ get a place in the spotlights, at the entrance. There is a shorter circuit for customers who want to take something quickly, and a longer one for those who really come to do their grocery shopping.
The retailer is entering into partnerships to increase its focus on convenience: “We now have a sandwich supplier in every city. We no longer make salads in our own workshops, we outsource that. Our recent participation in lunch chain BON should also be seen in that context. We are raising the bar in terms of convenience. With our integrated shops, we focus on consistency, something that is much more difficult with independent franchisers.”
Increasing speed
In recent years, Dehandschutter has worked mainly on profitability. The concept of the former Compact stores was conceived to be more flexible and easier to recover for new locations, as cities are constantly changing. “We are now building 25 % cheaper. We banish any complexity.”
Now Okay City is ready to really accelerate: “We want to increase speed: we are going to grow from twenty to 100 shops within about eight years.” That should be achievable, the retailer believes. In cities, there is demand for proximity stores, as people there are less dependent on a car. Urban customers usually live within a radius of 500 metres of their supermarket. However, several city districts are ‘food deserts’ today. At the same time, a lot of premises are available, because other retailers are disappearing. “We are coming up with a solution for those vacancies.” Colruyt Group anticipates the strongest expansion in the big cities of Antwerp, Brussels and Ghent, not coincidentally university cities with a large younger share of the population.
