The corona crisis did Colruyt Group no good: the supermarkets lost market share in the second half of the year and during the lockdown. Sales growth over the financial year 2019/20 remained below expectations.
Stronger growth for convenience stores
Colruyt Group's turnover increased by 1.6 % to more than 9.5 billion euros in the financial year 2019/20, the company reports in a press release. On a comparable basis, sales growth was 1.7 % including fuels and 1.4 % excluding fuels. That was below analysts' expectations. Remarkable news is also that the market share in Belgium of the chains Colruyt Lowest Prices, OKay and Spar fell slightly: it amounted to 32.1 % in FY 2019/20, compared to 32.2 % in 2018/19. This has put an end to a trend that had been rising for years.
Market share increased in the first half of the year and decreased in the second half of the year, the retailer says - and it also decreased during the COVID-19 crisis in 2020. "Proximity concepts, in particular, experienced faster growth during this period." Both Carrefour and Delhaize had already reported an increase in market share in the first quarter of 2020: both retailers do indeed have a stronger position in the convenience store segment.
Sales at the Colruyt stores in Belgium and Luxembourg rose by 2.2 %, with comparable sales growth of 0.7 %. The chain opened five new stores and renovated nine. OKay, Bio-Planet and Cru achieved a combined sales growth of 6.0 %. Excluding the additional turnover during the corona crisis, this was 3.1 %, mainly due to expansion and a positive calendar effect. Wholesale turnover (which also includes Spar-wholesaler Retail Partners Colruyt Group) rose by 0.4 %. "The renewed Spar Colruyt Group stores achieve more than average sales growth, as well as a profitability that is among the best in the market", the retailer says.
Colruyt's turnover in France fell by 13.9 % due to a difference in reporting period: the previous financial year comprised fifteen months instead of twelve. Colruyt's comparable sales in France increased by 4.5 % including fuels and by 6.2 % excluding fuels. Non-food retail sales rose by 6.7 %, mainly thanks to the acquisition of bike store chain Fiets!, as the combined retail sales of Dreamland and Dreambaby remained virtually stable.
Despite a challenging macro-economic climate, strong competition and varying promotional pressure, Colruyt Group was able to increase its gross profit margin to 26.8 % of revenue, but costs also increased. On a like-for-like basis, the EBITDA margin was 8.2 % of sales, while operating profit (EBIT) remained stable at 5.3 % of sales.