Buying behaviour is changing dramatically today, as the prices of A-brands in the supermarket are rising significantly. Delhaize shifts focus on purchasing power, by means of its private brands and the SuperPlus card.
Price is top of mind again
Inflation is hitting Belgium harder than neighbouring countries, a perverse consequence of automatic wage indexation. This is giving food retailers a hard time: they can hardly pass on the rising costs. Certainly Delhaize’s positioning is a challenge in times of crisis. “The perception weighs, while in reality we have very affordable solutions for our customers with our private brands,” confirms Jonathan Hertog, VP Fresh & Strategic Sourcing at Delhaize. The food retailer is up to speed with all the trends, but has to go ‘back to basics’ again today.
“What are customers looking for? They want to eat well – often healthy -, save time and save money. The latter especially now. Those are the basics in food retail, and we have to update them today. I am convinced that our ‘better eating’ strategy is here to stay and remains enormously relevant, but given the context, we must focus more than ever on affordability and purchasing power. There is so much pressure on the market that price is again top of mind for the shopper. Our SuperPlus card is being used more and more in this respect and really makes a difference.”
Private label gaining popularity
Delhaize sees how buying behaviour is changing rapidly now. In recent years, the share of private label kept rising, but during the pandemic that growth fell back: “National brands won during Covid, because people were looking for more security and also a bit of indulgence. But in March that trend reversed: all the ground that brands had gained was wiped out in one month. That is huge. In Belgium, we also saw that the share of discounters fell back slightly during the pandemic, but in the first quarter of 2022, they took another big step forward.”
Betting on purchasing power
Until recently, manufacturers could get away with raising prices, but that seems to be changing. They are pushing customers towards private label. The share of food in the budget is rising again, people are facing the facts: they now have less money for fun services and activities. “We mainly see customers shifting towards private label, but there are also customers who ‘shop’ more and combine our stores with other retailers.”
Private label is certainly a strength for Delhaize in this context. “We will highlight our own brands even more as a way for customers to make smart choices. We have a strong trump card there, with a private label that is often even better quality than a comparable A-brand and can be 15 to 30% cheaper. We also have first-price products on all major references. That, combined with discounts of up to 15% for SuperPlus members, is a response to the customer. And we are going to push this purchasing power even further in the near future.”
More loyal customers
The recent launch of the Delivery+ delivery subscription also fits perfectly in that logic: “Delivery+ is for us a way to make ordering cheaper for loyal home delivery customers. We learned that from the telecoms market: the more products you offer in a bundle, the less likely people are to walk away. If we can serve customers on more different fronts, both offline and online, they will become more loyal to the Delhaize brand.”
Are you curious how Delhaize is responding to the changing buying behaviour of price-conscious shoppers? Jonathan Hertog is speaking at the RetailDetail Food Congress, which is taking place in Antwerp on 9 June. Also on stage that day: speakers from Deloitte, Coca-Cola, Nestlé, Kriket, Pieter Pot, VLAM, Gorillas and Mosa Meat. An appointment not to be missed for food professionals! Early bird tickets can be ordered until 18 May via the button below.