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Colruyt Group saw sales rise only slightly last financial year, while operating profit and market share were again under pressure due to fierce competition on the Belgian food market.
Falling market share
Equalling the results of the previous financial year was not in the cards for Colruyt Group. CEO Stefan Goethaert referred in a press release to the stronger competition in the Belgian retail market and lower than initially anticipated food inflation, which put pressure on the operating result. While turnover rose 1.1% to almost 11 billion euros, operating profit fell 5% to 446 million (4.1% of turnover). Net profit fell to 6.4% 334 million euro (3.1% of sales).
That competition remains fierce in the supermarket sector is shown by the fact that the market share of Colruyt Lowest Prices, Okay, Spar and Comarkt together fell to 29%, compared to 29.3% in the previous financial year. Indeed, Colruyt faces strong competition from players such as Delhaize, Albert Heijn, Jumbo, Intermarché and Carrefour, which are increasingly opening their independent supermarkets on Sundays.
Acquisitions
That food retail sales did remain stable was due to the acquired Match stores that now operate under the provisional CoMarkt banner: without CoMarkt, sales would have fallen by 1.3%. Okay, Bio-Planet and Cru realised a combined sales increase of 1.9%. At Spar, sales increased thanks to the acquisition of some Match and Smatch shops. The food service activities increased by 21.6%, partly thanks to the acquisition of Délidis.
Among the other activities, JIMS’ sales rose strongly thanks to the acquisition of NRG, there was a 15% comparable sales increase for Newpharma, slightly rising sales for The Fashion Society and a 3.4% decline for Bike Republic.
Meanwhile, the group did get rid of one headache file: just recently, Colruyt Group reached an agreement with Groupement Mousquetaires (Intermarché) on the sale of 81 loss-making French supermarkets. As the macroeconomic context will remain challenging and uncertain and the strong competitiveness in the Belgian retail market will continue, Colruyt Group is targeting a stable result for the current financial year.
