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Retail

Sligro Food Group Sees Sales Rise, Despite 'Challenging Conditions'

By Steve Wynne-Jones
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Sligro Food Group Sees Sales Rise, Despite 'Challenging Conditions'

Dutch wholesaler Sligro Food Group saw its sales rise marginally in the first half of its financial year, despite what CEO Koen Slippens described as "challenging conditions for us and our competitors".

Slippens said that the economic climate in the Netherlands and Belgium has "cooled considerably" in the first half of the year.

"The decline in consumer confidence in both countries once again looks to be a predictor of market trends," he said. "In the Netherlands, we witnessed a slight upturn in the market, which is primarily price-driven. In Belgium, the market is contracting. There was a substantial rise in logistics, energy and staff costs."

Sales Performance

The group saw a 0.4% increase in net sales in the period, to €1.135 billion, while EBITDA was down 8.9% to €18 million, due to the implementation of IFRS 16 accounting standards, Sligro said.

In the Netherlands, the group saw sales increase 'in line with the market', while it was also able to absorb price increases to a 'reasonable extent', it said.

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Sales were up 0.2% in the Dutch market, with the most business pressure on the drinks and catering sectors, as reflected in the market, the business said. Gross margin as a percentage of sales fell by 0.2% compared with last year, to 24.2%.

Its Dutch operations also saw the integration of the strategic partnership with Heineken, as well as the implementation of SAP across its operations.

"The combination of these activities has meant, however, that we have not yet reduced the costs of our central organisation to the extent we feel is necessary to absorb the loss of cover from retail," said Slippens.

Sligro sold off its retail operation, EMTÉ, to a consortium comprised of Jumbo and Coop last year.

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'Outperformed The Market'

In Belgium, the group said that it 'outperformed the market', chiefly due to the positive progress it has made with its new outlet in Antwerp over the first six months of the year.

Sales increased 5.6% at its Belgium operations, while gross margin as a percentage of sales fell by 1.7% to 22.2%.

"We know that sales in Antwerp need to grow further to achieve break-even operations," said Slippens. "In addition, we are building on our infrastructure and a single head office organisation for Sligro Food Group Belgium. In Belgium, too, we need to make investments so that we can reap the benefits later."

Looking ahead, Sligro said that current consumer confidence trends point to 'continuous pressure on market development', describing the Dutch and Belgian business climate as 'harsh'.

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'We will continue to push for sales growth combined with cost management so that we can absorb cost inflation and volume pressure,' the company said. 'We will also continue to focus on strategic programmes for the future.'

© 2019 European Supermarket Magazine – your source for the latest retail news. Article by Stephen Wynne-Jones. Click subscribe to sign up to ESM: European Supermarket Magazine.

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