We bring you the latest full year results from growing European variety discounter Action, and what its priorities are for the year ahead.
2016 sales up 34%, LFL sales +6.9%
Total sales for Action's six markets grew by 34% in FY2016 to €2,675m, up €680m on the previous year. Impressive like-for-like sales at a total group level came in at 6.9%, indicating a strong performance across the business. Profit was also strong, with an increase of 37% to €310m, indicating a strong and healthy business model.
Commenting on the results, Action CEO, Sander van der Laan, has said, 'Our sales growth demonstrates that in all six countries where we operate, our customers are embracing what we offer: a broad and ever-changing range of products at the lowest prices. At Action, our customers see every day that quality can come at a low price and for this reason they voted us European Retailer of the Year for the third consecutive year.'
Estate grows by 197 stores
Action added to its estate with just under 200 stores in 2016, clearly indicating the variety discounter's ambitions to grow, particularly in its focus markets. Action opened 100 new stores in France and 60 new stores in Germany in 2016, with both markets accounting for over 80% of new stores. Action entered Austria and Luxembourg in 2015, adding only 6 new stores across these markets in 2016 as it finds its feet. In Belgium, Action added 18 new stores while in the discounters home market of the Netherlands, 13 new stores were added as growth slows down due to the retailer market saturation. Action sees potential for c.100 more stores in the Netherlands - a total of c.450 stores.
Strategic priorities ahead
Action refers to itself as a 'one brand, one format' business allowing it to benefit from scale and company-wide efficiencies that help to keep costs and prices low. Action's three strategic priorities based on its culture and values are:
- Strengthen the unique customer value proposition - price, surprise and convenience is what Action is known for. It also aims to strengthen its digital presence and marketing strategy
- Expand the business internationally - Action's ambition is to open more new stores in 2017 than in 2016, with the majority of openings in France and Germany. The new distribution centres in Germany and France will support this store growth and optimise logistics
- Further develop the cost effective, simple and scalable business model - to achieve its growth ambitions, Action strives to constantly develop its scalable business model. It will continue to invest in its employees, new stores, supply chain and systems.
To read our recent store visit report on an Action store in Amsterdam, Netherlands, click here.
Priya Chandarana, Retail Analyst, IGD
Priya is a Retail Analyst at IGD, specialising in research on the growing discount channel. To learn more about how IGD's research can benefit your business further, please get in touch - [email protected]