Despite higher costs due the coronary pandemic, Colruyt Group expects to make at least as much profit this financial year as last year. This was stated by the retailer at its General Meeting.
Problem with price perception
The corona crisis had different effects on Colruyt Group, said Chairman Jef Colruyt in his speech. The food stores experienced large increases in turnover, while the non-food stores had to close temporarily. In response to the pandemic, the group made additional investments to guarantee the safety and health of customers and employees. Employees also received additional compensation. Nevertheless, the net result of the current financial year will at least match that of the previous year, says the top executive. Although that result can still be influenced by the great uncertainty caused by the crisis. Colruyt Group recorded a profit of 380 million euros last financial year.
According to Operations Director Marc Hofman, the fact that Colruyt lost market share during the lockdown is due to the fact that consumers visited convenience and proximity stores more often. But there’s nothing wrong with the Colruyt formula, he says in De Standaard: “In periods when corona is less of an issue with people, we once again get more customers in our supermarkets.” The retailer opens more small stores than large ones and continues to focus on its low price strategy. However, there is a problem of perception: due to the ban on promotions, food prices rose and this was more visible at Colruyt than at other retailers, because the discounter is aligning its prices with those of its competitors. The company again expects more competition, partly due to the ambitions of Dutch retailers Albert Heijn and Jumbo in Flanders.
