Dutch retailer Jumbo reported an 8.8% year-on-year increase in sales in the first half of its financial year, which it says fell short of the market average of 9.4%, resulting in a slight drop in market share.
The company generated sales worth €5.96 billion in the first six months of its financial year, with sales growth mainly driven by price increases due to inflation.
Ton van Veen, who took office as Jumbo's CEO last March, commented, "This was not our very best period. Domestically, we have faced circumstances that demanded a lot of our attention. We also had to contend with unprecedented price, rent and energy increases, a sharp rise in collective wage agreements and declining consumer confidence."
Jumbo added that it aims to put more focus on price, range, service and sustainability in the coming months.
The retailer plans to settle for a lower margin on essential foods and Jumbo own-brand products in particular, as it seeks to mitigate the adverse effects of inflation on consumers.
van Veen added, "We have very limited influence on many price increases. In price negotiations with A-brand suppliers, we are keen to moderate price increases, which has led to some difficult negotiations.
"Fortunately, the situation with excessive price increases is now starting to calm down somewhat, but it will take some time before we can speak of normalisation."
Other Highlights
Jumbo's foodservice concept, La Place, saw sales growth of 36% year-on-year, to €69 million, benefitting from increased spend in this channel in the first six months of 2023.
Elsewhere, turnover from online activities in the Netherlands grew by 8.8% compared to the first half of last year, as more and more customers discovered the advantages of 'Jumbo Bezorgeloos', a service offering attractively priced subscriptions to home delivery, the retailer added.
Last spring, Jumbo also terminated its partnership with Getir, the owner of quick commerce firm Gorillas as it aimed to focus on the further development and growth of its own online activities.
In Belgium, Jumbo reported sales growth of 68%, to €169 million, which resulted in an increase in its market share.
Full-Year Outlook
Jumbo said that it is working on a series of initiatives that will start to contribute to the further growth of the group amid a challenging situation.
"It is now important to continue to build on a healthy future and our distinctive character by continuing to focus on price, range, service and CSR. We do this in parallel with all the market challenges we face," van Veen commented.
"The second half of 2023 will undoubtedly remain challenging, but I am confident that we will continue on the path to further growth together with all our employees, franchisees and chain partners."
