Last February, Carrefour suffered from the presentation of poor annual figures in Europe outside France. Belgium was one of the main areas of pain for both growth and profitability. It therefore comes as no great surprise to see Belgian company Colruyt lower its outlook for the financial year. However, the sharp fall in the share price on Friday shows that this risk had not yet been factored in by the market.
Colruyt says that the combined market share of its various brands (Colruyt Meilleurs Prix, Okay, Spar, and Comarché) has been declining since the start of the fiscal year, although the situation has improved slightly since the beginning of the year. The company, which has 760 stores under its own management, is being penalized by strong competition in the Belgian retail market. In addition, food inflation is proving to be lower than initially expected. This is affecting revenue growth, which is now expected to be only 1%, while operating profit is now expected to be slightly lower. Net profits are expected to fall sharply.
A particularly complicated Belgian market
The Belgian market generates just over 90% of Colruyt's revenue. The retailer is facing a dilemma: on the one hand, Belgian consumer demand is slowing, while on the other, the range of products on offer continues to expand. This phenomenon is accentuated by the strong comeback of the sector's number two, Ahold Delhaize, which has completed the conversion of its stores and is seeing its market share grow at Colruyt's expense. In addition, other retailers are adopting more aggressive strategies, such as increasingly common Sunday store openings.
However, the stock is bouncing back today, up 8.5%.
Colruyt Group NV is a retail group that operates in the areas of expertise 'Food', 'Health & Well-being', 'Non-Food' and 'Energy', mainly in Belgium, but also in other countries including France and Luxembourg. Within the 'Food' area of expertise, this concerns Colruyt Lowest Prices, Okay, Comarkt/Comarché, Bio-Planet, Cru and the affiliated Spar Colruyt Group and Delitraiteur stores. In France, in addition to Colruyt stores and DATS 24 filling stations, there are also affiliated Coccinelle, Coccimarket, Panier Sympa, Epi Service and VivEco stores. There are more than 750 own stores and over 1,000 affiliated stores. Solucious, Culinoa, Valfrais and Délidis deliver foodservice and retail products to professional customers in Belgium (hospitals, SMEs, hospitality sector, etc.). Colruyt Group Fine Food comprises industrial-scale production departments. The 'Health & Well-being' area of expertise mainly consists of Jims, fitness clubs located in Belgium and Luxembourg, and Newpharma Colruyt Group's Belgian online pharmacy active in various countries such as Belgium, France, Switzerland, the Netherlands, Germany and Romania. The 'Non-Food' area of expertise comprises the own stores Zeb, PointCarré, The Fashion Store and Bike Republic (mainly in Belgium) and the affiliated PointCarré stores. Furthermore, Colruyt Group's operations also cover print and document management solutions (through Symeta Hybrid) and strategic consultancy, enterprise architecture and programme management (through Myreas).
Colruyt Group NV also holds interests, including in Virya Energy (of which DATS 24 has been a part since June 2023), Dreamland and BON. The group employs more than 33,000 employees.
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