In Belgium, Albert Heijn continues to focus on prices: the price gap with the Netherlands is narrowing, and some A-brands already are significantly cheaper. This is not only a result of the VAT increase in the north...
Albert Heijn came to Belgium promising 'Dutch prices', which were supposed to be far lower than Belgian prices. However, it seems the tables are turning: some categories and products are now significantly cheaper in Belgium and overall price differences are becoming smaller, an analysis of the price evolution of almost 15,000 references over the December 2018 - August 2019 period by data specialist Daltix at the request of RetailDetail has shown. A number of manufacturers had informed us of significant price reductions at Albert Heijn Belgium.
FMCG sales prices in both Belgium and the Netherlands have risen since December, but the increase was more significant in the Netherlands. This trend can partly be explained by a VAT increase in the Netherlands at the beginning of this year, when the lowest rate went from 6 % to 9 %. All retailers in the Netherlands have therefore raised their prices in December and January. As a result, the price gap between the two countries across all categories more than halved from 3.3 % to 1.5 %. But when we look at specific categories and products, we see a very mixed picture.
Personal care and beer
The large price difference in the drugstore and personal care departments is striking: these products are generally significantly cheaper in Belgium than in the Netherlands. This also applies to beers, spirits and household and pet products. These products were already cheaper in Belgium in January, and they have become comparatively even cheaper since then. AH Belgium also became more competitive in the soft drinks and dairy categories.
Haircare brand Elnett (owned by L'Oréal) for example is 25 % cheaper in Belgium. Veet (20 %), Durex (17 %), L'Oréal (14 %), Studio Line (11 %), Colgate (11 %) and Head & Shoulders (11 %) are also cheaper in Belgian Albert Heijn stores.
The fact that many Belgian beer brands are more expensive in the Netherlands is not surprising: this applies to - amongst others - La Chouffe (19 %), Vedett (15 %), Grimbergen (14 %) and Duvel (12 %). More striking is the price difference for Nutella (15 %) and for the private label discount brand AH Basic (11 % cheaper in Belgium). Most of Albert Heijn's other private labels are indeed lower-priced in the Netherlands. Certain non-food products, tea and cheese are also cheaper in the north.
At product level, price differences can be as high as 60 %: the 825-gram Nutella Family pot became more expensive in the Netherlands after the VAT increase, but Albert Heijn raised the price of the product considerably in June (followed by a few competitors). During the same period, the retailer implemented two price cuts in Belgium. As a result, the price difference is currently as high as 1.40 euros for one pot. Considerable price differences (more than 30 %) also exists for products such as Pepsi Max, Whiskas cat food, Gillette shaving gel, Zwitsal baby shampoo, Nescafé Original, Evian mineral water, Bonduelle crispy corn, Pampers wipes, Always Ultra Normal and Dr.Oetker Ristorante Speciale pizza
Conclusion? Albert Heijn Belgium has not significantly become more price aggressive across all categories in comparison with the Netherlands, taking into account the VAT increase there. However, the retailer is focusing on price reductions in a selection of products in order to create a competitive price perception. In general, the Dutch supermarkets are still cheaper, but not for each category, and the differences are narrowing.