Albert Heijn-Delhaize plans mean tougher competition for other supermarkets

Tuesday, 15 January 2019 09:16
An AH store in Lier in Flanders An AH store in Lier in Flanders © Wikimedia
Plans by the Dutch-Belgian supermarket giant Ahold-Delhaize to expand in Belgium, which we report elsewhere, could mean problems for competitors like Colruyt, market analysts said.
The news that the Albert Heijn chain will not only stay but double the number of AH stores is “logical,” retail expert Jorg Snoeck told Het Nieuwsblad. When Ahold merged with Delhaize in 2016 it was expected that AH would withdraw from Flanders, where all of its stores are, so as not to compete with its own partner.

However it turns out that AH has created its own market niche, and competition between the two chains does not appear to be harmful. “There's very little cannibalism,” said Delhaize CEO Xavier Piesvaux, explaining that the two chains together have the whole market covered.

The growth of both chains is more likely to be bad news for Colruyt, the market leader. According to consumer organisation Test-Aankoop, Colruyt's prices are lower when there is an Albert Heijn in the local area – with AH forcing Colruyt to lower its prices. The more AH stores there are, the more widespread that effect will be, to the detriment of Colruyt's margins.

To make matters worse, because Colruyt has a far more extensive network, one single AH store could have an effect on several branches of Colruyt.

The market is also now preparing itself for another Dutch arrival – the cost-cutting Jumbo chain, which though described by Piesvaux as a “non-event,” will nonetheless make its effect felt on chains like Aldi and Lidl, as well as Colruyt. Analysts argue Ahold-Delhaize will also be forced to react, with whatever knock-on effect that has.

Finally, Ahold-Delhaize intends to introduce pick-up points for its increasingly popular online shopping subsidiary Bol.com in Delhaize stores, in the expectation that buyers who come in to pick up packages will stay to do their shopping.

Alan Hope
The Brussels Times
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