Dutch discount chain Action had a very good year in 2016, with a 34 % turnover increase to 2.675 billion euro, mainly thanks to its enormous store network expansion.
Increased pace of expansion
Over the course of the 2016, Action opened 197 new stores, mostly in France and Germany, bringing its total to 852 worldwide. France added 100 new stores, growing from 120 to 220, and Germany grew from 76 to 136 Action stores.
It also continued its expansion in its native territories, from 341 to 354 in the Netherlands and from 117 to 135 in Belgium. Its Austrian store network grew sevenfold, from one to seven.
The chain will relentlessly continue its expansion strategy in 2017, aiming to open even more stores than in 2016 and once again the bulk of these openings will be in France and Germany.
New distribution centers to support growth
New distribution centers were opened to support Action’s growing store network: its first non-Dutch distribution center opened its doors near Paris in May 2016 and the company will add 2 more later this year. Not surprisingly, they are being built in its two most important growth markets, Germany (Biblis, in the second quarter) and France (Labastide, in the third quarter).
“Action is now a real European retailer with a healthy geographical diversification”, CEO Sander van der Laan said.
Scale also benefits margins
The store network’s tremendous growth also helped Action’s 2016 turnover to climb 34 % to 2.675 billion euro. On a like-for-like basis, it would have grown 6.9 %, slightly lower than the 7.6 % growth in 2015.
Nevertheless, the chain’s operating income also grew 37 % to 310 million euro and as it outgrew the overall turnover growth, this resulted in higher margins. The company says this is “because of scale advantages and a continuous focus on cost management.”
Action’s workforce also grew accordingly, from 29,000 to 35,000 people.
