Tobacco ban costs Jumbo sales and market share

Despite lower sales and market share in 2024, Dutch supermarket chain Jumbo says it is ready for a new phase of growth – emboldened by the “breakthrough” in Belgium, where the retailer became operationally profitable.

Fewer stores

Jumbo saw its sales fall 2.7 % to 10.72 billion euros last year, a drop that the retailer says can be attributed to the spin-off of restaurant chain La Place (accounting for 50 million euros) and the tobacco ban (which cost the chain 400 million euros). Supermarket sales fell 2.3 % to 10.64 billion euros, but excluding that tobacco ban sales would have risen by almost 3 %.

As tobacco had a relatively high sales share at Jumbo, its market share also fell – to 20.5 %. In 2022, the supermarket chain still had a market share of 22 % in its home market, a year later that was 21 %. The number of shops in the Netherlands fell from 692 to 689. Online revenue remained stable at 724 million euros, with the revenue share of online rising slightly to over 7 %. The number of online business customers is increasing, especially in healthcare.

Jumbo’s profitability has improved, meanwhile: EBIT (operating profit) is expected to continue rising from 98 million to 113 million and net profit from 22 million to 30 million, CFO Peter van Erp says. Without restructuring costs, these amounts would have been 150 million and 58 million euros, respectively.

Tough negotiations

CEO Ton van Veen sees a good foundation for further growth, despite the downwards trend. “Our customer satisfaction has continued to increase over the past year both in shops and online, and both the number of primary customers and average spending per transaction have continued to rise. This gives us confidence that we are taking the right steps.”

Improved price positioning is one of those steps: last year, Jumbo cut prices by 150 million, thanks in part to sharper purchasing through international buying groups Everest and Epic Partners. Due to these tough negotiations with brand manufacturers, some products were temporarily unavailable: the chain says it accepts this as collateral damage on the road to success.

The company also implemented rigorous cost cuts: shrinkage due to theft fell by thirty million euros, joint procurement through international organisations brought in fifty million, ending sports sponsorship earned the retailer twenty million and the reorganisation at the head office will deliver fifty million in annual savings from this year.

Break-even in Belgium

Belgian revenue grew 22 % to 397 million. Organic growth in the existing shops (at 7 %) was significantly higher than the average market growth in Belgium (at around 1 %). The retailer attributes this momentum partly to the increasing number of independent operators. Earlier than expected, the Belgian supermarket business therefore broke even.

For 2025, the CEO remains confident despite the uncertain economic and political conditions: “With our tightened multi-year plan for 2025-2027, we are going to win back and retain customers, attract new customers and thus increase our market share again. We will realise the investments required to achieve this by continuing to focus on cost reductions.”