Falling market share puts Colruyt Group under pressure

the Colruyt supermarkets have lost market share due to the corona crisis, according to annual figures from Colruyt Group. Sales have just passed the ten billion euro mark and profit forecasts are very uncertain.

Grocery stores are losing ground

Colruyt Group’s turnover increased by 3.7% to more than 9.9 billion euros in the 2020/21 reporting period. Excluding fuels, the increase in sales amounted to 6.4% – Dats saw its sales drop significantly, by more than 25%. Gross profit margin increased to 28.1 percent of sales, partly due to less promotional pressure. But the costs have also increased, due to the corona measures and other investments. The two tendencies neutralized each other. Net income amounted to 385 million euros or 3.9% of turnover – i.e. excluding the capital gain that the group was able to record thanks to the contribution of Eoly Energy to a new holding company. This is a little less than what analysts expected. The previous financial year, the net result was 380 million euros or 4.0% of turnover.

The performance of food stores was especially expected. Competitors Delhaize and Crossroads claimed market share gains in recent quarters. And indeed: the market share of Colruyt Best Price food stores, OK and spar together fell to 31.3%, admits Colruyt Group. In the 2019/20 financial year, it was still 32.1%. The explanation is obvious: the group has proportionally fewer convenience stores than its competitors, and precisely these convenience stores have done better than other store formats during the coronavirus crisis.

“Difficult to reconcile”

Colruyt’s sales in Belgium and Luxembourg increased by 3%, in France by 7.2%. OK, Bio-Planet and believed together achieved revenue growth of 12.5 percent. Wholesale sales – including sales from Spar stores – increased by 15.5% in Belgium and France. Catering wholesaler Soluble saw its turnover fall by 13.4%.

Non-food retail sales increased further: +37.6%, but this was mainly due to the full integration of The fashion societythe holding company of ZEB, PointSquare, The fashion store and ZEB for the stars clothing chains. Combined in-store sales of Dreamland, dream baby and republic of the bike (formerly Fiets!) fell 2.7%, due to mandatory store closures. Online sales progressed well, both in food (Collect&Go) and non-food, but the retailer does not provide details on this.

Because the uncertainty resulting from the corona crisis is too great, Colruyt Group does not risk giving concrete forecasts for the current financial year. The company specifies that the consolidated net income for the previous year “will be difficult to match”.

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Colruyt supermarkets have lost market share due to the coronavirus crisis, according to annual figures from Colruyt Group. Sales have just passed the ten billion euro mark and profit forecasts are very uncertain. Grocery stores lose ground Colruyt Group’s turnover increased by 3.7% to more than 9.9 billion euros in the 2020/21 reporting period. Excluding fuels, the increase in sales amounted to 6.4% – Dats saw its sales drop significantly, by more than 25%. Gross profit margin increased to 28.1 percent of sales, partly due to less promotional pressure. But cost…