Falling market share puts Colruyt Group under pressure

Colruyt Group

The Colruyt supermarkets have lost market share as a result of the corona crisis, according to the annual figures of Colruyt Group. Sales just missed the ten billion euro mark and profit expectations are very uncertain.

 

Food stores lose ground

Colruyt Group's revenue increased by 3.7 percent to more than 9.9 billion euros in the 2020/21 reporting period. Excluding fuels, the increase in sales amounted to 6.4 percent - Dats saw its sales fall significantly, by more than 25 percent. The gross profit margin rose to 28.1 per cent of turnover, partly due to lower promotional pressure. But costs rose too, as a result of corona measures and other investments. Both trends neutralised each other. The net result landed at 385 million euros or 3.9 percent of sales - that is excluding the capital gain that the group was able to book through the contribution of Eoly Energy to a new holding company. This is slightly less than what analysts had expected. Last financial year, the net result was 380 million euros or 4.0 percent of sales.
 

The performance of the food stores was especially to be awaited. Competitors Delhaize and Carrefour claimed market share gains during the past quarters. And indeed: the market share of the food stores Colruyt Lowest Prices, OKay and Spar together fell to 31.3 percent, Colruyt Group admits. In the financial year 2019/20, it was still 32.1 percent. The explanation is obvious: the group has proportionally fewer convenience stores than its competitors, and exactly those convenience stores did better than other store formats during the corona crisis.

 

"Difficult to match"

Colruyt's sales in Belgium and Luxembourg increased by three percent, in France by 7.2 percent. OKay, Bio-Planet and Cru together realised a revenue growth of 12.5 percent. Wholesale sales - including sales at the Spar stores - rose by 15.5% in Belgium and France. Foodservice wholesaler Solucious saw its turnover decline by 13.4 percent.
 

Non-food retail sales showed a greater increase: up by 37.6%, but this was mainly due to the full consolidation of The Fashion Society, the holding company for the ZEB, PointCarré, The Fashion Store and ZEB For Stars clothing chains. The combined shop sales of Dreamland, Dreambaby and Bike Republic (formerly Fiets!) fell by 2.7 percent, as a result of the compulsory store closures. Online sales did grow strongly, both in food (Collect&Go) and non-food, but the retailer does not provide details on this.
 

Because the uncertainty resulting from the corona crisis is too great, Colruyt Group does not venture to give concrete forecasts for the current financial year. The company does state that the consolidated net result of the previous financial year "will be difficult to match".