Colruyt winning price war at expense of Carrefour

17 December 2005

BRUSSELS — Discounter Colruyt is emerging as the winner of the Belgian supermarket price war as Carrefour confronts a fall in market share, research bureau AC Nielsen has said.

In the past year, Carrefour has done everything possible to attract more customers to its hypermarkets and GB stores. However, discount coupons and 500 products reduced in price have failed to increase its market share.

In fact, Carrefour had a market share of just 29.3 percent in the third quarter of 2005 compared with 31.4 percent at the end of last year, newspaper ‘De Morgen’ reported on Tuesday.

In the same nine months, Colruyt increased its market share from 18.8 percent to 19.9 percent. The market share of Delhaize — which has maintained its strategy — rose slightly to 26 percent.

The turnover figures of Colruyt also prove it is not suffering from the price war. Turnover rose in the period April-September by 11.2 percent compared with the same period last year. It earned almost EUR 1.8 billion.

“Carrefour is playing the game wrongly,” Vlerick Management School retail professor Gino van Ossel said. “It is offering low prices, but cannot come near Colruyt and is essentially making an advertisement for its greatest competitor”.

A recent survey of leaders in the food industry conducted by the Vlerick Management School also indicated that Carrefour cannot win the price war.

“Colruyt saves in all areas. Its shops are frugally furbished, it places a more restricted assortment on the shelves and closes its shops earlier,” Van Ossel said.

“Carrefour wants to offer the same shopping pleasure as Delhaize for the prices of Colruyt, but that is not so easy.”

Subject: Belgian news