In the first half of its financial year, Colruyt Group achieved growth in revenue and operating profit. However, the group's food stores continue to lose market share.
Reduced promotional pressure
In the first half of the broken financial year 2020/21, Colruyt Group's revenue increased by 5.7% to almost 5 billion euro. The growth was due to increased volumes in the food stores as a result of the corona crisis, but also, among other things, to the increase of the participation in Fraluc Group, the holding company that oversees the fashion chains ZEB, PointCarré, The Fashion Store and ZEB For Stars. The non-food stores, the food service department and the fuel activities saw their turnover decrease. Online sales of both food and non-food showed strong growth, but the company does not communicate details about this.
The group's gross profit margin increased to 28.1% of turnover. Operating profit (EBIT) was 311 million or 6.2% of revenue, an improvement of 17.5%. However, operating expenses increased, but promotional pressure was lower at the start of the financial year, according to Colruyt Group.
Market share under pressure
It is noteworthy that the market share of Colruyt Lowest Prices, OKay and Spar fell to 31.7% in the first half of the year, from 32.5% a year earlier. The company refers to the faster growth for convenience store concepts during the corona crisis. In that segment, competitors such as Delhaize and Carrefour are stronger. Also in the second half of last fiscal year 2019/20, Colruyt Group's food stores already lost market share.
Colruyt's Lowest Prices supermarkets saw revenue increase by 6.5% in Belgium and Luxembourg. The retailer opened two new stores. OKay, Bio-Planet and Cru achieved a combined sales growth of 18.4%. Wholesale revenue - including Spar - rose by just under 20% to 495 million euro. Foodservice wholesaler Solucious lost 14.4% of sales due to the closure of the on-trade. In France, Colruyt's sales increased by 7%. Next year the company will occupy a new distribution centre there.
Despite the great uncertainty in the market, Colruyt Group expects a result for the current financial year at least as good as the previous financial year.