Dutch wholesaler Sligro saw its sales grow 8.3 % in the third quarter. However, volume increase was disappointingly low, even now that the former Metro shops have reopened under the Sligro M banner.
Weak summer
High inflation pushes up sales through higher prices (+ 8 %), but kept down volume growth down at 0.3 %. The weather was not good enough to encourage people to go to bars, while declining spending earned Sligro a weak summer in both the Netherlands and Belgium. The wholesaler also saw “an increasing number of bankruptcies in the hospitality sector”, which reduced sales volumes.
Sligro reports that its acquired Belgian Metro locations are doing well: sales are “moving towards the set targets”, but are therefore not yet achieving them. Sligro M locations added 41 million in sales in the quieter third quarter, but hopes are up for the important fourth quarter. The festive quarter will still be difficult, the wholesaler is already warning: because of pressure on volumes, high inflation and interest rates, but also because of Sligro’s investments in SAP.
Operating profit will be limited this year, but the group does hope to cut costs and gain efficiency by ‘decapitating’ Belgium: since the beginning of this quarter, there has been a unified Belgian-Dutch structure, led by Dries Bögels. Thanks to that simplified organisation, cost-cutting initiatives and an “improved sales mix”, Sligro hopes to eventually become sustainably profitable in Belgium. The wholesaler also intends to gradually reduce its tobacco sales, and counts on a recovery of the price balance and a normalisation of inflation.
