Ahold Delhaize is in the process of developing a new strategy to lift its flagging Belgium business, after the region posted four successive quarters of either flat or declining comparable sales growth.
Announcing its full year results yesterday, the group revealed, that Q4 comparable sales at its Belgium operations were flat (0.0%),
This follows a 0.3% decrease in comparable sales in Q3, a flat (0.0%) performance in Q2, and a 0.6% decline in Q1 of last year.
Net sales were up 0.8% in the fourth quarter of the year, to €1.29 billion.
Commenting on the group’s Belgium market performance yesterday, analyst Fernand de Boer of Degroof Petercam noted, “Belgium was clearly below depressed by higher promotions, shrink and logistic expenses.”
Plan Underway
In an conference call with analysts, Ahold Delhaize chief executive Dick Boer described Belgium as experiencing a “difficult year”, particularly for the group’s company owned stores.
However, he added that the new leadership team in Belgium, under new chief executive Xavier Piesvaux, is “developing a new strategy that we will share with you soon at a later date”.
The group introduced a new Delhaize Belgium executive committee in January, and has a ‘clear priority to stabilise market share and grow top line and profitability’ between now and 2020.
As part of this, the group will review its commercial plans, seek to improve product availability, shrink reduction and the in-store experience, and further simplify its business model.
Promotional Strategy
More promotions are also set to be on the agenda, as Boer outlined.
“On Belgium, we […] noticed when we merged the two companies that the promotion level in Belgium was from Delhaize point of view rather low percentage-wise. But also, the impactful promotions, for instance, what we did in the Netherlands with our campaigns, with the saving campaign, has not been, let's say, used actively enough to our opinion.
“So that's what Delhaize is currently applying more […], how you position your campaigns better and create also the excitement for your customers.”
Boer added that he wants Delhaize to “lead” on promotions, something that the management team there is currently working on.
“We clearly see that there's an opportunity of differentiating ourselves more in the Belgium market,” he added.
Belgium's Favourite Supermarket
One year ago, in March 2017, Ahold Delhaize outlined its intention to make Delhaize the ‘favourite supermarket’ for Belgian shoppers, ‘winning the hearts and minds of customers and become the best retailer in Belgium’.
It also announced that ti will transfer all its supermarkets in the country, such as those trading under the Albert Heijn banner, to the Delhaize brand by next year.
Xavier Piesvaux was unveiled as the new CEO for the business in September. He has 27 years' experience in retail, including positions as senior vice-president at Walmart Canada and CEO of Romanian retailer Mega Image.
© 2018 European Supermarket Magazine – your source for the latest retail news. Article by Stephen Wynne-Jones. Click subscribe to sign up to ESM: The European Supermarket Magazine.
