In twelve years, the Albert Heijn brand in Belgium just about matched established values such as Delhaize and Carrefour. Jumbo is nowhere near that level. However, the impact of both Dutch newcomers is undeniable.
Huge advertising budgets
The arrival of Albert Heijn in Belgium in 2011 caused a strong shockwave in the food retail world, and after the merger with Delhaize the impact became even bigger. Today, the chain is quietly becoming an established name in the north of the country. In contrast, Jumbo’s Flemish adventure does not seem to be a walk in the park: expansion is struggling and the chain recently announced the closure of its Zonhoven store. How strong are both retail brands really according to Flemish consumers?
In a relatively short time, Albert Heijn has secured a place among the top six Flemish food retail brands, observes WPP Belgium’s Johan Hellemans based on the Brand Asset Valuator (BAV for short), WPP’s measurement tool that measures brands on four pillars: differentiation, relevance, appreciation and knowledge. “This is remarkable, because supermarkets are in the top 20 largest advertisers, they spend huge budgets. You have to be able to sustain that. Even for an Albert Heijn, that’s not obvious.”
Brand awareness and relationship strength
Interesting in that context is a comparison of the relationship strength of supermarket brands. “That index expresses how connected your customers feel to your brand. Do they like coming to your store, do they come often, are they loyal, will they recommend you?” On that front, the Dutch chain has made great strides: Albert Heijn now occupies fifth place, behind Colruyt, Aldi, Lidl and Delhaize but just ahead of Carrefour. “They are still somewhat less known and they do not yet have as extensive a shop network as the bigger retailers, but when the customers come, you see that they can compete well.”
Jumbo is far from joining that leading group. “With them, you see that in terms of brand awareness it’s already reasonably good, but less so in terms of relationships. People are still hesitating a bit. Jumbo scores only slightly higher than Makro, Spar or Okay. If their goal is to become a fully-fledged alternative to the dominant parties in the market, they are going to have to take some more steps. I don’t know what Jumbo has in mind, but I assume they won’t remain satisfied with niche positioning.”
Novelty is not enough
In the eyes of Belgian consumers, Albert Heijn stands out mainly for its promotions, pricing and product range. Consumers also appreciate its reliability, simplicity and friendliness. This puts the chain somewhere between Colruyt and the hard discounters Aldi and Lidl. Shoppers, on the other hand, are more likely to associate Jumbo with smaller players such as Okay and Spar, which have a less strong brand positioning
“For the Dutch chains, the ‘novelty’ aspect plays a part, they come with a different offer, people are curious. But they have to keep investing: the ‘new kid on the block’ argument alone won’t get you there. You have to be able to play off other factors.” Albert Heijn will probably continue to focus on promotions and price. But what arguments can Jumbo play off with? Consumers see the chain as price-favourable and hip, but to really be seen as a full-fledged alternative, the retailer will have to find additional differentiating factors.
“Albert Heijn is a lot better armed to compete than Jumbo. But it will have to wait for the results for the crisis year 2022 to see how the proportions shift further under the influence of high inflation,” said Johan Hellemans.