Sligro Food Group is looking for a partner to collaborate with regarding its ailing supermarket chain Emté. The Veghel-based wholesaler seeks to find someone before the end of the year, hoping to find a future for its food retail division.
More value and scale
The goal is to generate sufficient value and scale to compete. Currently, the chain has a 2.5 % market share in the Netherlands and could very well suffer in the rapidly-changing market, according to CEO Koen Slippens and CFO Rob van der Sluijs during the publication of their semi-annual financial results.
The division with the 131 Emté supermarkets disappointed in the past two quarters. Net turnover went up 0.5 % in the past six months and even 1.2 % in the past quarter, but that was lower than the market average. Consumer turnover dropped 0.3 % in those six months, but went up 0.6 % in the past quarter. If one ignores the period 3.0 stores were closed, the chain achieved a 1.5 % like-for-like turnover growth compared to a 0.1 % turnover drop for the 2.0 stores.
However, this growth is not sufficient enough to pay for the restructuring and new formula costs. The remodeled formula’s turnover did evolve positively, but it will take more time to reach the business case’s goals, Slippens forecasts. The company will also temporarily halt the transformation into 3.0 stores after 2017. It has already altered 24 stores and will remodel another 4 by the end of the year.
Collaborate instead of selling
According to the wholesale company, a collaboration is strategically more important than to sell its food retail division. It could strengthen the division’s scale, leading to synergies for purchases, logistics. Investments in employees, division, processes, systems and data will also be maintained this way, the Group expects.
It also hopes to maintain its annual 15 to 20 million euro in costs that can be cut thanks to Sligro Food Group’s internal synergies from its food retail and food service combination. This increased blurring is another reason for Sligro to keep a hold of both divisions.
Increased turnover, level profit
Over the course of its first six months, Sligro Food Group generated a 1.435 billion euro turnover, up 5.9 % compared to last year and an autonomous 3.3 % turnover increase. Operating profit increased 1 million euro to 35 million euro and with a 28 million euro net profit in this timeframe, it performed similar to last year. Last year, it generated a 2.8 billion euro turnover and a 73 million euro net profit.
Sligro Food Group consists of a food service division, active in Belgium and the Netherlands with fifty self-service wholesale stores and eight supply centers, and a food retail division with 131 Emté full service supermarkets in the Netherlands.
