Could a successor to Jeff Colroot turn the tide? “Competition is deteriorating with Colruyt and this one is falling into this trap”

Good news from the Colruyt family: CEO and strongman Jeff Colruyt (64) will be stepping aside to COO Stefan Gotthart on July 1. The man who helped Colruyt grow from a small retailer to a market leader will only explain the end of an era on Tuesday. Retail expert Pierre Alexandre Pellet (Gondola) sees the move as an important signal to the outside world that Colruyt wants to bring a breath of fresh air. “We also need new inspiration and new vitality.”

“It’s always been said that the day Jef Colruyt steps down will be a big day. You should know: The man really turned the whole store landscape upside down with an unwavering commitment to the lowest price guarantee. He’s also the one who helped the company grow tremendously, in terms of Sales volume and margin. With him, Colroyt has gone from a small retailer to a market leader.”

But Billett also knows: Now the charismatic CEO is leaving at a time when things weren’t quite right yet, in the middle of a storm. The annual figures announced by the retail group on Tuesday may be more optimistic than those for last year, but the net result fell from 288 to 201 million euros. According to the outgoing CEO, this is “less than feared.”

The truth is, these figures in no way reflect a much-needed fundamental shift for the supermarket group. The engine explodes, that’s for sure. At 64, does Jef Colruyt no longer have the energy to turn the ship, is he tired of fighting? “Jeff has done a titanic job, but even giants are never,” Pellett says. “Especially in the current context, the retail industry is so stressed out, with CEOs burnt out. You can’t keep it going. 64 is really an appropriate age to leave.”

New vision

According to Billiet, a professor of retail management at Solvay Business School, Colruyt lacks a clear strategy or new vision. It may now come soon with a ‘changing of the guard’. “I myself would have expected a softer transition, with a co-CEO. By taking a step aside, CEO Colruyt is really giving the new batch a chance, without continuing to look over their shoulder as a father-in-law.”

The retail expert sees two possibilities for this sudden move. Either Colruyt has his future plan ready and will now begin to roll it out – which will immediately put it two steps ahead of what everyone else thinks it is. “If not, he is two steps behind and a vision still needs to be developed and acted upon, from a blank slate.”

Billett sees four reasons why an engine might fail.

Competition determines the profit margin

The supermarket group is known to be struggling more than ever with low profit margins. A direct result of its promise to always guarantee the lowest price. An unsustainable situation, according to Billet. “A market leader cannot remain a follower,” said the CEO of retail platform Gondola. “Colruyt is the biggest in our country, but competition sets the bottom line for profit margins. If a competitor puts a small amount of inventory of an item on the market at a very low price, even if it’s just a few pallets, Colruyt has to follow suit. The competition breaks down with Colruyt and this falls into this trap.

This leads to price wars with suppliers. “Colruyt has become a very expensive customer for its suppliers. Why? Because it’s taking back the margins it’s losing, at least in part, from its suppliers, whose profit margins are also vanishing. So they’re no longer enthusiastic about working together so intensely. So this whole system starts to limp.”

(in) clear focus

This year there was also a sudden sale of the Dreamland game series and the withdrawal of wind farm operator Parkwind. “In recent years, the Colruyt Group has invested heavily in non-food items, biotechnology and energy, among others. The question has been raised among stock market analysts and shareholders whether food and supermarkets are still Colruyt’s focus. The sale of Dreamland and Barcoind was a clear signal Very much on the family retail group’s desire to stay in the supermarket business, but then it has to be now driving Takes.”

Colruyt’s story is tough for consumers

By this, Billiet means that Colruyt should offer more than just the lowest prices. “It’s already working on it. The intention is for Colruyt to become a life way Become: not only buy food from Colruyt, OKay, Spar or BioPlanet, but also do sports in JIMS fitness centers, order health products online from Newpharma. And when you have a baby, you buy everything from Dreambaby.

In theory, the lifetime customer support is great, but it’s still everything even today Too little and too slow. “It’s not enough to make up for the loss with food,” Pellett says. Colruyt as one life way It’s also a very difficult story, because today Colruyt’s customer is focused on those lower prices. How do you get such a client on board, especially in a full blown crisis? Delhaize has, among other things, bol.com integration and home delivery, many times with an omnichannel story. Whereas Colruyt started doing it earlier.”

A big player in a (very) small country.

If the engine fails, you need fuel in the tank. But Billett says, there isn’t one right now: The retail range is too small. “The supermarket competition is organized at the international level. It is no longer enough simply to be the best in a small category like Belgium, because the big brands only offer good conditions if you buy in large quantities. Colruyt does it at the Belgian level, but at the European level it remains a small player “.

According to Billet, sooner or later it will affect them. “If a large international retailer like Ahold Delhaize is pouring into Belgium or Europe, America is still where things are going well. In addition to France, Carrefour also has Brazil. So the question is: which supermarket chain will take over Colruyt responsible for it? Or maybe it will be taken over by another major retailer?

took over or took over?

The truth is that everything is evolving within the retail landscape. There are good acquisition opportunities, including at Louis Delhaize, very soon. And what about the rumors that Dutch jumbo will prey on Colruyt? “It was possible to have conversations in the past,” Pellett says.

“They are two groups that could be compatible. This alignment is the same as with some French retailers. There is also similar speculation about the French Auchan. Today, the door is already open: by exiting the energy sector and some other non-food sectors, Colruyt is again deliberately involved In the supermarket business. To buy or sell. As we know the chain today, it is likely that it will not be around for long. This is simply no longer sustainable in the medium term. ”