Belgium’s Colruyt Group has posted a 3.4% increase in full-year revenue, to €9.4 billion.
The performance was boosted by the acquisition of French foodservice business Pro à Pro, which was completed in February, the retailer noted. Excluding the impact from this acquisition, revenue growth was 2.8%.
Operating profit was €493.3 million, which was a 2.7% decline on the previous year. Overall net profit, however, was up 4.6%.
Colruyt, which is the market leader in Belgium, said that it managed to increase its market share during 2016/17 to 31.7%, up from 31.5% in the previous year.
Margin Performance
‘Gross margin improved to 25.4% (25.3% last year),’ the retailer had written in its statement. ‘Excluding petrol, the margin rose by 20 basis points, primarily as a result of a milder competitive climate in the first semester. In the second semester, the gross margin was lower than last year as a result of tougher competition and our consistently applied lowest-price policy. The Colruyt banner continues to offer its customers the lowest price for each product at each moment.’
Retail revenue at the group rose 2.4%, to €7.22 billion. Retail accounted for 76.2% of the group’s consolidated revenue, with Colruyt saying that its Belgian and French businesses ‘remained competitive’ last year.
Revenue at stores in Belgium and Luxembourg was up 1.4% last year.
Analyst Comment
Commenting on its performance, Barclays European Food Retail Equity Research said, "Following the disposal of its profitable French foodservice division, Pro à Pro, we expect the retail division will now represent around 95% of the group's EBITDA. With already a 31.7% market share in the mature and competitive Belgian food-retail sector, Colruyt is moving towards saturation in its domestic market, while the additional selling space will likely generate lower returns than enjoyed historically.
"Colruyt's remaining activities (wholesale, renewable energy) struggle to represent a convincing growth driver, as their profitability is still only half that of the retail division."
© 2017 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.
