Test-Aankoop: “Colruyt remains the cheapest”

Red Market on the rise

Test-Aankoop collected and compared prices in three groups. The first group were national and international brands, with cheese, charcuterie, vegetables and fruit. The second group contains budget brands like Everyday and Winny, while the third group contained the supermarket’s home brands.

Based on these three groups, Test-Aankoop created an index, with the number 100 for the cheapest supermarket. For every % other supermarkets are more expensive, a point gets added.

The rather unsurprising conclusion is that Colruyt is still the cheapest chain, while Red Market (Delhaize Group’s discount chain) is inching closer. In areas with a Red Market, Colruyt’s prices are 2 % lower than elsewhere as Colruyt always guarantees the lowest price around. Globally, Red Market still has to admit defeat to Colruyt as the latter’s home brands are still a lot cheaper.

Okay, Colruyt’s convenience store chain, also performs well and ranks third in the list. Okay has recently opened its 100^th store and aims to open another 80 in the next 10 years.

Albert Heijn drops

In group 1, Colruyt ranks first alongside Red Market, just like last year. If vegetables, fruits and meats are excluded, Red Market would take first place: the Delhaize affiliate has lower prices for its brand products with Makro as number two, even though the gap has become bigger.  The difference in 2012 was 2 %, but it has now grown to 5 %.

Albert Heijn dropped 2 places to number 5, with an index score of 108. It is remarkable that the gap between the most expensive and cheapest supermarket, in this group, has become smaller. In two years’ time, the gap dropped from 31 to 25 %.

It is not that remarkable Albert Heijn has lost ground, according to Gino van Ossel (teacher at Vlerick): “Albert Heijn’s impact on nationwide prices was relatively small at first, as it only had a few stores. Currently, AH is not a local phenomenon anymore, which means that an increasing number of competitors (like Colruyt, Delhaize and Carrefour) have reacted and have tweaked their prices.”

“Albert Heijn has always marketed itself with very large discounts on a small number of products”, according to retail connoisseur Jorg Snoeck.

Leader Price alongside Colruyt

The prices of group 2 and 3 were all considered “own brands” in this year’s Test-Aankoop study, thanks to discounters Aldi and Lidl as these do not differentiate between prices of both groups.   That means that both budget brands as regular home brands are in the ranking.

Colruyt’s budget brand is the cheapest, alongside another brand – French Leader Price, which has several stores in the Walloon region. Remarkable is that Colruyt’s home brand is 76 % more expensive than the budget brand, while Aldi and Lidl’s products are 14 and 16 % more expensive.

Retail experts believe it is partially a method matter: “It is clear that the strong surge in own brands have made it difficult to compare product branches”, according to Van Ossel. That is why Test-Aankoop has decided to merge all own brands, both home brands and first-price brands, while neglecting any possible qualitative argument. Some retailers might argue that there are qualitative differences on top of price difference.

It has become increasingly difficult to differentiate between budget brands and home brands: “Discounters have a hard time to position themselves as practically all their brands are home brands, while Lidl has started introducing premium home brands. It might be more transparent for the average consumer to differentiate as well”, Snoeck wonders.

Competition for hard discounters

In the overall ranking, Colruyt takes the lead, followed by Red Market (104) and Okay (105). Albert Heijn and Carrefour Hyper are fourth and fifth. Lidl, Aldi, Makro and Leader Price were not added to this ranking, as they do not have every product range.

Hard discounters, Aldi and Lidl, have been added alongside other retail chains’ home brands with remarkable results, according to Snoeck. “Colruyt sticks to its DNA and is still the price champion across all product ranges. The big three (Carrefour, Colruyt and Delhaize) are inching ever closer however. Look at Delhaize for example. It claims to focus on quality, but it has apparently not ignored price setting either.”

“It is noteworthy that these department store groups have used their home brands to attack the hard discounters like Aldi and Lidl. If we look at the price levels in the “own brands” range, then discounters are experiencing heavy competition from the big three.”

“We can also conclude that nearly everyone is chasing each other in the Belgian supermarket landscape. Nearly 90 % of the market is in a 10 % price range, according to Test-Aankoop’s analysis. Price differences in the Belgian market are relatively limited”, Gino Van Ossel concludes.