After a challenging 2022, Dille & Kamille continues on its momentum with a second store in Wallonia and a fourth in Germany. Next year, the sustainable retail chain will also move into France, with a local partner.
On 29 March, Dille & Kamille will open its second Walloon shop in the centre of Namur, in the popular pedestrian shopping street Rue de la Croix. Along with Liège and two Brussels shops, it is just the fourth shop to also serve French-speaking customers in Belgium. The French language will soon become more important for the retailer, though, as Dille & Kamille will cross the border into France next year, managing director Hans Geels confirmed to RetailDetail, where he was a guest on Tuesday at the invitation of the Sales Management Association (SMA).
“We are not going to tackle France on our own, but with a local partner, in a hard franchising model where we retain control. We do not have the same level of ambition in France as we do in Germany, where the strongest focus is anyway. But if it works out with that partner, it is more manageable in terms of investment. We have known them for more than five years, and after five years of saying no we were sensitive to their arguments, they are hugely convinced. It is a pilot: franchising is not our model, but if you have a click with the right partners, it should work. It does make economic sense: you need to invest less, you can scale up faster, but in terms of guarding our brand philosophy, it is harder to manage.”
In Germany, Dille & Kamille is doing well, Geels confirms. At the end of June, the chain will open its fourth German shop in Bonn. “We are very happy that German consumers seem to get us: the shop in Munster, in the north of North Rhine-Westphalia, is a resounding success. Cologne and Düsseldorf are also in our top 15. We are more well-known there than we thought.”
That success is not at all surprising: shops in the east of the Netherlands, from Groningen to Maastricht, make half of their sales from Germans on some days. Shops close to the coast also get a lot of German customers. “We have a high stopping power for German tourists: they do not know this concept”, Geels explains. Incidentally, the foreign concept is a one-to-one copy of the Dutch one. “We are not so far to optimise that yet, for that we need to do more market research.”
Reinventing the business model
In 2022, Dille & Kamille saw sales rise by 18 %, Geels added. The retailer opened just three new shops last year, so there was nice organic growth, partly due to price increases. “The number of products in the basket did come under pressure, but the products all became slightly more expensive. That compensated. Profits remained level. That is not quite what you want, but there is only one cause: inflation. Costs for wages, rent and expansion went up. In Belgium, wages went up 20 % in two years, which is impossible to keep up with. Materials alone have become 23 % more expensive on average. Passing on that inflation does not work one-to-one.”
“Over the next two years, we actually have to reinvent our business model”, the CEO believes. “How do you still get all these cost changes in line with a price that consumers understand? We are a ‘nice to have’ compared to the supermarket. Fortunately, Dille & Kamille does suffer less from price competition because all our products are private label. That is one of the best strategic decisions we have ever made: we are not only a retail brand, but also a product brand.”
What 2023 will bring is very uncertain: “The first three months were not thriving but okay. It is becoming increasingly difficult to predict how things will really go. Last year we were behind budget until September, and suddenly we straightened everything out in the autumn. It is very volatile.”