Sharpened strategic course initiated
- Consumer turnover in the first half of the year grows to € 5.96 billion (plus 8.8%)
- Turnover growth in Belgium accelerates by 68% and amounts to € 169 million
- Online activities grow to € 396 million (plus 8.8%)
- Acquisition of six Jan Linders stores final after approval by ACM
- Sharpening strategic course aimed at ‘Jumbo as Jumbo is intended’
- Ambitions in the field of sustainability and CSR concretized and accelerated into practice
- Large-scale sports sponsorship is making way for more local involvement
- Half-year turnover of La Place increased by 36% to € 69 million
In the first half of the year (up to and including week 28) of 2023, Royal Jumbo Food Group recorded a group turnover of € 5.96 billion. That is an increase of 8.8% compared to the same period last year. The growth in turnover is largely due to unavoidable price increases as a result of the ongoing inflation. To somewhat contain the adverse effects of this for customers, Jumbo is content with a lower margin, especially on essential foodstuffs and products of the Jumbo Private Label. Jumbo assumes that the peak of price increases is behind us, but is still taking into account continued cost increases due to higher wages and rents, among other things. Jumbo’s turnover growth in the Netherlands was slightly below the market average in the past period (9.4%, source: NielsenIQ), as a result of which the market share fell slightly. In Belgium, Jumbo did beat the market with a turnover growth of 68%, which resulted in an increase in market share. Food service formula La Place benefited from increased catering spending in the first six months of 2023 and achieved a turnover of € 69 million. This is an increase of 36% compared to last year.
Cost increases
Ton van Veen, who took office as CEO of Jumbo last March, about the first half of 2023: “This was not our very best period. In our own house we have had to deal with circumstances that demanded a lot of our attention. In addition, we are contending with unprecedented price, rent and energy increases, a sharp rise in collective labor agreement wages and declining consumer confidence. We have very limited influence on many price increases. In the price negotiations with A-brand suppliers, we are strongly committed to moderating price increases, which has led to a number of difficult negotiations. Fortunately, the situation with excessive price increases is now starting to calm down, but it will take some time before we can speak of normalization.”
Back to basic
It is precisely in these challenging market conditions that Jumbo believes it is important to accelerate the building of its distinctive capabilities and to focus more on price, range, service and sustainability. The Management Board and the Supervisory Board, led by Colette Cloosterman-van Eerd, who also took office in March, have therefore focused on tightening up the strategic course. Ton van Veen: “We want to return to the basis of our formula, when we managed to surprise the market with an affordable, wide and relevant range and the very best service. We will focus much more on ‘Jumbo as Jumbo is intended’: fully focused on and built around the wishes of the customer.”
Sustainability initiatives
In line with the tightened strategic course, Jumbo wants to speed up the further sustainability of its business operations. To this end, the company is committed to the objectives of the Science-Based Target initiative (SBTi), in which the requirements as laid down in the Paris Agreement are leading. Jumbo commits to the entire CO2-make its own business operations neutral by 2040 with a reduction target of 85% to be achieved in 2030 compared to the reference year 2022. In order to gain knowledge and experience, a Jumbo store in Bergen op Zoom has been rebuilt in recent months with more than 80% circular materials; this store uses 62% less energy than before. In addition, the supermarket company will work on CO2reduction in the chain, in collaboration with its suppliers. Jumbo is also developing sustainability initiatives in various other areas. For example, on 31 July, the free disposable bags for fruit and vegetables (potatoes, vegetables and fruit) will be phased out. Instead, customers can use reusable fresh bags for unpackaged fruit and vegetables.
Product Range
The vast majority of Jumbo’s fresh assortment now comes from the Netherlands; that share will continue to rise in the coming years. Jumbo emphasizes the widely supported pride in the beautiful and tasty products from Dutch soil with its own ‘van Dichtbij’ logo. Since this spring, the supermarket company has had pork products from Zonvarken on its shelves, an innovative Dutch concept that places very high demands on animal welfare and attention to nature. The Dutch Society for the Protection of Animals has awarded these products the 3-star Better Life quality mark.
Locally involved
The increased attention to sustainability and CSR was already part of the Jumbo Multi-Year Plan 2022 – 2026, but the recent tightening of the strategic course has given it even more focus. In order to keep the focus on this, it has been decided, among other things, to stop large-scale sports sponsorship in the near future. Instead, the company is more committed to local initiatives where customers see direct results. A good example is the annual fundraising campaign for the local Food Banks, where customers can donate products to support people in the area. The annual King’s Breakfast, in which Jumbo provides free breakfasts to one million primary school students, also fits in well with this approach.
Shop database in the Netherlands and Belgium
Jumbo has continued to invest in innovation and modernization of its supermarkets in recent months. During this period, 22 shops in the Netherlands were adapted to the latest wishes and needs of consumers. The Dutch store base has remained the same. In the coming months, six shops of the Jan Linders chain will also be converted to the Jumbo formula. The Netherlands Authority for Consumers and Markets (ACM) has now approved the acquisition of these stores by Jumbo. The expansion of the Jumbo store base in Belgium is progressing steadily. With the opening of four new supermarkets in the past six months, the counter there now stands at 31. At least three new locations are planned for this autumn. The Jumbo stores in Belgium are attracting more and more customers, which translates into a turnover growth that is above average market growth and an increasing interest in the formula among potential franchisees. Due to this favorable development, Jumbo has every confidence in further growth on the Belgian market.
JumboOnline
Jumbo’s turnover from online activities in the Netherlands shows a growth of 8.8% compared to the same period last year. More and more customers are discovering the benefits of Jumbo Bezorgeloos, an attractively priced home delivery subscription that Jumbo introduced last year. The number of orders also continues to grow in the business market. Last spring, Jumbo ended its cooperation with Getir, the owner of ‘speed delivery service’ Gorillas. This allows Jumbo to keep more focus on the further development and growth of its own online activities.
La Place
Food service formula La Place looks back on a good first half of 2023, in which turnover amounted to € 69 million (plus 36%). Well-known locations of the restaurant chain in Efteling and at Schiphol have recently been completely modernized. In addition, La Place has introduced a new food concept that is being tested in two completely renovated HEMA stores, in Hilversum and Alkmaar. Unlike in the self-service restaurants of La Place, according to this new concept, all orders are prepared on the spot.
Outlook
After a challenging period, Royal Jumbo Food Group is working on a series of initiatives that will contribute to the further growth of the group. Van Veen: “Entrepreneurship is in Jumbo’s DNA. It is very important to us to give this a new, contemporary dimension. Of course, while retaining our own unique characteristics: customer focus, service with a smile, the certainty that Jumbo will save you money for your daily shopping and our wide range of tasty, healthy and high-quality sustainable products. It is now important to continue building on a healthy future and on our distinctive capabilities by continuing to focus on price, range, service and CSR. We do this in parallel with all the market challenges we face. The second half of 2023 will undoubtedly remain challenging, but I am confident that we will continue on the road to further growth together with all our employees, franchisees and chain partners.”
Appendix: Infographic