Colruyt reported its first half results, with revenue rising by 5.7% to €4.99 bn. However, the retailer said its growth was below that for the market as shoppers’ changing buying habits saw ‘neighbourhood store concepts in particular experienced faster growth during the COVID-19 period, in part due to their greater number and therefore proximity’.
Underlining the difference in performance, Colruyt Group’s market share, as reported by the company, fell to 31.7% in H1 2020/21, from 32.5% in H1 2019/20.
Revenue, costs and gross profit margin all rise…
Revenue from its retail activities rose by 7.9% to €4.2 bn, with strong growth from its smaller stores. At its core Colruyt banner, in Belgium and Luxembourg, revenue rose by 6.5%, aided by the opening of two new stores, improvements at existing ones and ‘higher sales volumes, both offline and online’ due to the COVID-19 pandemic. The retailer underlined the continued investment it was making in prices, with it noting ‘price reductions and promotions offered by competitors are immediately integrated in its sales prices’.
Colruyt said its gross profit margin increased to 28.1% of revenue in H1. The retailer said its margin had benefited from ‘ lower promotional pressure at the start of the financial year (ban on promotions and discounts in Belgian supermarkets), miscellaneous product mix effects, operational improvements, alongside non-grocery related developments.
…Aided by performance of OKay, Bio-Planet and Cru banners…
Colruyt’s secondary banners, OKay, Bio-Planet and Cru, meanwhile, saw combined revenue growth of 18.4%. The retailer said the performance was aided by expansion and, as its Colruyt banner, due to ‘volume gains during the COVID-19 crisis’. OKay, given its role as a ‘neighbourhood supermarket where customers can do their daily shopping quickly, cheaply and easily’ probably benefited from the changes to shopper behaviour in Belgium during the COVID-19 restrictions. Three new stores were opened under the banner, including two OKay Compact city stores.
Colruyt said its grocery ecommerce sales increased ‘substantially’ in H1, due to COVID-19. The retailer continues to find success with its Collect&Go service, which is the market leader in the country. To support this growth and target shoppers in new ways, Colruyt is trialing several new online solutions. These include Collect&Go Connect, meal delivery from a dark kitchen, grocery delivery by cargo bike and the on-going trial of a home delivery service.
…And growth in France
In France Colruyt reported revenues rose 7.0%, excluding the effects of petrol, which it attributed to new stores and expansion and a rise in organic growth, due to COVID-19. In contrast to its performance in Belgium, the Colruyt banner probably benefited from its placement as a locally based supermarket, which could have seen it gain sales from the hypermarket channel. To sustain its growth in 2021 Colruyt said it would continue to invest in the country. It will focus on doubling its logistics capacity in the medium term, which will be supported in 2021 by the opening of a new distribution centre in Nancy.
COVID-19’s on-going impact leaves outlook ‘uncertain’
Looking to the second half of its financial year, Colruyt said it was ‘ unable to make any statements regarding expected macroeconomic, competitive or other trends’ given the unknown and on-going effects of the COVID-19 pandemic on its markets. As a result of this and, as it looks to ‘maintain its long-term focus and will continue to consistently implement its long-term strategy’.