Frits van Eerd, CEO of Dutch supermarket chain Jumbo, wants to expand into Wallonia - and from there, France. New markets can be conquered if a chain offers premium experience at discount prices, he says.
Maximum customer satisfaction
"If you want to conquer a market that is already over-saturated, you can only do that by offering more value for less money. If we have higher prices than the competitor, or a smaller product range, then we will not grow in this market. The same applies to service", Van Eerd said in an interview with Dutch newspaper De Volkskrant.
The CEO said he saw the light in America, where he noticed that store employees are much more motivated: "At Jumbo, we want to maximise customer satisfaction. If an employee walks around the store with a customer for 15 minutes, to help them to complete a meal, I think that is great! On the other hand, other brands may think it is too costly. "
Being better than a discounter
Jumbo works differently from other supermarket chains: "They either work with a very low price, but a tiny product range and little service, or a lot of service and a nice assortment but a high price. Just mention Lidl and Albert Heijn, and everyone knows where they stand. We are different: we have a product range like Albert Heijn's, prices like Lidl's, and better service. On all three aspects we perform better than a large part of the market."
Although Jumbo has the reputation of being a price fighter, the CEO wants to change that perception: "It is not about offering a bottle of coke at a bargain price. If you walk into one of our stores, I hope you think 'There is a warm atmosphere here, I am not in a shed with cheap products'."
Expansion to France on the cards
In the same interview, he also explains how the deal with Hema came about. Last December, both chains signed a deal that allowed Jumbo to take over 17 Hema stores in Belgium and the Netherlands, and put Hema products on shelves in all Jumbo stores. "We suddenly said: 'We are just going to do it'. The margins are so small that every step is a huge risk, but I would rather think how things can be made to work rather than to use cold calculations." The CEO says he would have preferred to buy the whole of Hema, but in the end he decided not to: "I know nothing about non-food." Nevertheless, he does not doubt that the collaboration will be a success: "Everyone understands that Hema is a great brand with products that fit perfectly on our shelves."
When asked whether Jumbo will expand into Europe, just like Hema, Van Eerd replies: "I have no idea. Currently, we only have foreign stores in the Dutch-speaking part of Belgium: in five years' time we want to have a hundred stores there. If that goes well, then we can continue: Wallonia, the French-speaking part of Belgium would be a logical first step. And then, of course, the language barrier to France will have been removed..."