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Dutch supermarket chain Jumbo was not eager to divulge the extent of its ambitions for the upcoming expansion to Belgium, but RetailDetail has found out that real estate agents have been asked to procure no fewer than thirty locations by 2019.
Rumours
Real estate agents confirm off the record they were handed the task to look for suitable locations for Jumbo in Belgium, starting with thirty locations in the next two years. Analysts think the low-cost chain may anticipate that its major rival, Albert Heijn, would retreat from Belgium after last year’s merger with local powerhouse Delhaize. This decision, which might free some space in Belgium’s crowded supermarket playing field, is set to be taken in 2019.
Jumbo has been trying to downplay its possible expansion towards Belgium: CFO Ton van Veen was quoted as saying “In our long time plan, we have added the option to expand towards the Belgian market. However, while we certainly will not exclude this possibility, the first couple of years we will not take concrete steps”. When asked for a reaction, Jumbo headquarters told our editor that “an expansion to Belgium certainly is not imminent”.
If Jumbo were to expand to Belgium, it would be bad news for a number of chains. Currently, market leader Colruyt has been very successful with its lowest price guarantee, but Jumbo has (equally successfully) copied that strategy towards the Dutch market: something’s got to give… On the other hand, Jumbo’s Foodmarkt aims for a much higher part of the market (targetting Delhaize and Carrefour), while its convenience concept Jumbo City would spell bad news for Carrefour Express and Delitraiteur.
“Jumbo is ready”
Belgian retail professor Gino Van Ossel believes in Jumbo’s Belgian plans: “The company is ready: it has regained its stability and cashflow after the acquisitions of Super de Boer and C1000 and its investment in eCommerce has paid off.” Also, there is the rivalty with Albert Heijn: “When that chain went to Belgium, Jumbo’s CEO Frits van Eerd thought he could do it better. His company has grown to be the second biggest in the Netherlands, but after the Ahold Delhaize merger the new company’s advantage has only grown more and more.” However, the professor does not believe in the speed of the plans: “I can not believe Jumbo would open thirty stores in two years’ time. Its rival Albert Heijn have been a lot slower in its expansion.”
Dutch retail expert Laurens Sloot also believes in Jumbo’s Belgian success, due to its wealthy and dense population. Moreover, Jumbo hails from the south of the Netherlands, where the culture is a lot more similar to Belgium than the austere culture of North Holland, Albert Heijn’s home base. Moreover, he sees the expansion as the first step towards a possible merger with Colruyt (“although the latter is currently larger and more profitable than Jumbo”) and Carrefour (“If the French company were to sell its Flemish stores, Jumbo would be among the most likely buyers, I think.”)
Van Ossel thinks Jumbo will focus first on its regular Jumbo supermarkets, which “fit in very well in Belgian culture, but will create fearsome competition for Colruyt”. His Dutch counterpart agrees, but “Jumbo might choose to also open one or two Foodmarkts in Belgium, to build brand awareness in its new market.”
