Five challenges for Jumbo in Belgium

As a side dish to the release of its financial results this week, Dutch supermarket chain Jumbo finally admitted to having secured its first locations in Belgium. Due to launch next year, which challenges will Jumbo's Belgian stores face?

 

1. Get local knowledge

Does Jumbo know the Belgian consumer? After all, there are a lot of cultural differences between the Netherlands and Belgium - not in the least when it comes to food. However, with Peter Isaac the chain has secured an experienced manager for its Belgian branch, having worked for Aldi for eleven years and for Lidl for fourteen. He knows how to nourish an expanding company... but will that be enough to repeat Albert Heijn's successful Belgian launch?

 

2. Build brand awareness

Does the Belgian consumer know Jumbo? Not likely, except for those who live along the border. Where Albert Heijn had a long international reputation to build its Belgian launch on, Jumbo is a lot younger and only gained its place in the spotlights after recent acquisitions. Work to be done here, but it can't be a coincidence that the Jumbo-sponsored cycling team was so eager to sign Belgian rising star Wout van Aert...

 

3. Convince customers

Why would the Belgian customer shop at Jumbo? In the Netherlands, the USP is clear as Jumbo guarantees the lowest prices... but in Belgium, market leader Colruyt already does this. The chain however also offers six other guarantees, including freshness of food, friendliness of staff and smoothness of shopping. Fourth in line at the till? Your groceries are free!

 

Moreover, Jumbo has some concepts that are unheard of in Belgium, including the huge Foodmarkt and local City stores. Both offer the possibility to eat and drink in-store, fulfilling the 'blurring' promise. How Belgian consumers will respond to that, is an open question...

 

4. Stick to lowest price guarantee

The lowest prices that Jumbo guarantees in the Netherlands, will be a lot harder to maintain in Belgium. Colruyt already stated that "If Jumbo wants a price war, we will be ready to wage one"... However, both chains work with local guarantees and keep the prices high where it is possible: certain items can be twice as expensive in one Jumbo store compared to another one. This comparison as well will be very interesting for any retail follower to keep up with.

 

5. Find suitable locations

Last year, several real estate agents had already told RetailDetail (off the record) that they were given the order to look out for thirty large stores (up to 2500 sqm), mostly in suburban locations. That is a very ambitious starting point in an already overcrowded market, but it is not impossible (as Albert Heijn has been showing for years).

 

Growth through acquisition will also prove hard, as there are no apparent 'victims' in the market. Some franchisers may switch sides, but that is about it. Will Jumbo look for (and find) local franchisers? Or will the chain encourage Dutch franchisers to expand to Belgium? As competitor Albert Heijn knows, it is hard to find good franchisers... over the years, that chain has found only six Belgian franchisers!

 

All those questions, we will keep an eye open for the answers... because certainly this is one of the most interesting recent retail evolutions in Belgium!

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