Dutch retailer Jumbo has reported a 7.3% increase in sales, to €11.02 billion, in its 2023 financial year, one year on from the retailer exceeding the €10 billion sales threshold for the first time.
In this period, consumer sales under the Jumbo formula increased by 7.1% to €10.89 billion, the company said in a statement.
The retailer's market share in the Netherlands declined slightly to just over 21%, as it grew slower than the average market growth in the Dutch supermarket sector, data from NielsenIQ showed.
In 2023, Jumbo reduced the prices of over 1,000 products. It seeks to implement more price cuts for 2024 to help ease the financial pressure on shoppers.
The company added that its purchasing partnership with Everest and Epic Partners will provide an opportunity to implement price cuts.
Economies Of Scale
According to Jumbo CEO, Ton van Veen, the economies of scale will have a positive impact on Jumbo's profitability from 2024 onwards. He added, "We can also improve operating profit by making smart choices and taking innovative steps.
"For instance, I have high expectations from Jumbo Retail Media, our advertising platform that is attracting more and more business customers. Or, take for example the monetisation of anonymised customer data – there is a lot of potential in that, too."
Store Network
Jumbo's store network stood at 725 outlets as of the end of 2023, including ten former Jan Linders supermarkets in North Brabant, Limburg and Gelderland.
In Belgium, it opened seven new outlets during the year, taking the total to 33.
This year, eight new locations are planned for Belgium, including a Jumbo Foodmarkt in Ghent.
E-Commerce And Distribution
The company reported an 8% increase in online grocery orders, to €722 million, in 2023, equating to 7% of total sales.
However, the company noted that it would be challenging to make the channel profitable as investment would need to be increased.
Last year, Jumbo commenced the construction of a new mechanised central distribution centre (CDC) for fresh produce in Nieuwegein.
It will supply fresh products with a shelf life of eight days or longer, such as dairy, cheese and meat products, to stores from spring 2024, as well as enabling Jumbo's regional distribution centres to focus more on the flow of 'ultra-fresh' products.
Shrinkage Levels
Elsewhere, losses due to stolen products amounted to around 1% of sales, Jumbo said.
"A 1% loss due to theft may not sound like much, but in our case it's more than €100 million a year. If we could put this amount into price reduction, all our customers would benefit," van Veen added.
Outlook 2024
In 2024, Jumbo will build on its 'Jumbo zoals Jumbo bedoeld is' ('Jumbo as Jumbo is meant to be') strategy, seeking to increase customer satisfaction, improve market share and limit rising costs.
According to van Veen, the company is not venturing into "concrete predictions" as there is "still a lot of uncertainty in the market".
He added, "In any case, what is rock solid is the shared confidence in our mission to put the customer first and to work on sustainable growth for the future."
