The announced arrival of Dutch chain Jumbo in Belgium will shake things up quite a bit. Market leader Colruyt will be forced to adopt a more up-market store concept, while Delhaize may be forced to rebrand (some of) its supermarkets to its sister chain Albert Heijn, a new report predicts.
Price war unavoidable
The LZ Retailytics report assumes that Jumbo will enter the Belgian market with its larger Foodmarkt concept, including food service expertise from its restaurant chain La Place, and added to that a web shop with a number of pick-up points. The result? Nothing less than disruption…
Jumbo’s combination of attractive stores and a lowest price guarantee would be first and foremost a threat to Colruyt’s no frills stores: the market leader would be forced to redesign its stores while keeping prices low. This prediction mirrors evolutions in Germany, where even the local hard discounters were forced to upgrade their store design and product range after their competitors invested heavily in nicer stores. This may pose a lethal threat to Colruyt’s concept…
Turnover per surface
Another question is how Belgo-Dutch retail group Ahold Delhaize will respond: the group is active in Belgium with both its local Delhaize chain and with Dutch Albert Heijn, that now sees its main rival Jumbo enter its second market. LZ Retailytics compared the turnover per square metre for both chains with Jumbo’s (and Colruyt’s) and noticed the latter is way ahead of the others. Jumbo however would beat Albert Heijn, which in turn performs a lot better than its Belgian sibling. It would therefore be no surprise if the group were to consider turning at least some of its Delhaize stores into Albert Heijn supermarkets.
One thing is certain: Jumbo coming to Belgium would have a tremendous impact on the Belgian retail market. Albert Heijn has already proven that a Dutch chain can make a big success out of its Belgian branch, and it is only to be expected that the arrival of Jumbo would cause tidal waves in the Belgian market…
