Belgium weighs down Sligro profits

Disappointing sales, lingering software problems and rising labour costs in Belgium are taking their toll on Sligro‘s profits. Nevertheless, the Dutch food wholesaler is gaining market share, both in the Netherlands and Belgium.

Net profit under pressure

Sligro posted a net profit of just six million euros in 2023, well down from 39 million in 2022. Last month, the Dutch chain had already announced that sales had grown by 15.2 % to 2.9 billion euros, but that growth came almost exclusively from inflation effects and the acquisition of nine Metro stores in Belgium.

Sligro’s Belgian expansion is not going to plan: the chain had counted on achieving 70 % of Metro’s original sales by the end of last year, but that target was not met. The company is facing ongoing problems implementing SAP software. Moreover, wages in Belgium rose 11 % due to automatic wage indexation, compared with 5 % in the Netherlands.

Synergy and cost cuts

CEO Koen Slippens points out that the wholesaler did gain market share in both markets and that service levels improved significantly. The company is cautious about passing on cost increases to customers as the hospitality sector is still struggling.

The decision to stop having separate boards for the Netherlands and Belgium should bring more speed and synergy to the organisation, as well as lower costs: 150 positions will disappear.