Jumbo profits continue to slide

On a turnover of more than eleven billion euros, Dutch supermarket chain Jumbo was only able to achieve 22 million euros in profit last year. This year will also be challenging, says the retailer, who is committed to cost savings and “sustainable growth” in Belgium.

Worrying figures

Jumbo’s profitability is under severe pressure: its profit after tax dropped from 137 million euros in 2020 to 114 million in 2021, 80 million in 2022 and even just 22 million in 2023. That steep drop – by 75 % – is the result of sharply rising costs, which the retailer cannot pass on to consumers due to tough price competition. Indeed, in the Netherlands, its market share has also been under pressure for two consecutive years.

As a result of the worrying figures, the Van Eerd family that owns Jumbo is not paying itself a dividend this year. To get back on its feet, the company is reviewing its strategic priorities. Cost control is paramount: sponsorship budgets were already cut and shoplifting is being tackled “creatively”. Procurement through European retail alliances Epic Partners and Everest should improve price competitiveness and margins. Retail media should generate additional revenue.

Also noteworthy: although restaurant chain La Place had a good year, Jumbo has reconsidered its strategic importance. “This puts La Place more at a distance”, the annual report says in some vague wording. The estimated value of the brand name was also reduced.

Belgian ambitions adjusted

The annual report says that Jumbo “continues to believe in the Belgian market”, but is struggling with a dilemma: critical mass is needed to become profitable, but expansion requires substantial investments and the necessary funds are currently not available. Moreover, Jumbo repeats the familiar complaint that competitors try to use objection procedures against building permits to prevent or delay the opening of new Jumbo supermarkets.

The expectation to grow to one hundred Belgian shops within five years is no longer realistic due to changing market conditions, the chain admits: “However, we will continue to achieve sustainable growth; we now expect to have opened around fifty shops by the end of 2025. We prefer to do that in close cooperation with franchisees.” With this, the annual report actually only officially confirms the adjusted ambitions Jumbo already made known in September last year.