Dutch retailer Jumbo has appointed Ton van Veen as its new chief executive, following the stepping down of former CEO Frits van Eerd.
The first non-family member to lead Jumbo, van Veen praised the group's "unique culture based on entrepreneurship", while supervisory board chair Colette Cloosterman-van Eerd said that he will provide the "continuity and stability" that Jumbo needs in these challenging times.
Here are five challenges (and opportunities) facing van Veen as he takes on his new role.
1. Recover Lost Ground
Jumbo saw its market share in the Netherlands decline marginally last year, to 21.5% (according to NielsenIQ) which, given that the retailer continued to open new stores in the period, it's something that van Veen and his team will be eager to address.
Also worth noting is the fact that arch-rival Albert Heijn added a whole percentage point to its market share (to 37%) following its acquisition of the DEEN chain, while the Ahold Delhaize business is likely to receive a further boost as the Jan Linders chain is amalgamated into its operations – a factor that may prompt Jumbo to raise its game.
With Jumbo achieving a record turnover of above €10 billion for the first time last year, now could be the time to take bold steps. Could it make a move for Hoogvliet, Vomar or Dekamarkt, perhaps?
2. Improve The Brand Image
Last September, former Jumbo CEO Frits van Eerd was named as a suspect in an investigation into money laundering and VAT fraud, a situation that led to him stepping down from the retailer, at first temporarily, and as we now know, permanently.
While Jumbo as a business has not been implicated in the investigation, its effect on brand reputation has not gone unnoticed. "The recent developments surrounding Frits have not left us unmoved," supervisory board chairman Karel van Eerd said in a statement at the time.
Elsewhere, a marketing mis-step ahead of last year's World Cup in Qatar left a sour taste in the mouths of many consumers. van Veen and his team may be planning a charm offensive to improve Jumbo's image.
3. Cost Challenges
Earlier this month, a pricing dispute with Mars made headlines, with Jumbo (along with Germany's Edeka) accusing the confectionery and pet food giant of setting prices too high. "We are confronted with very high price increases from certain suppliers," a Jumbo spokesperson was quote as saying by RTL Nieuws.
Elsewhere, automatic indexation of wages in Belgium – with wages rising in line with inflation – has also impacted the retailer. Belgium has been identified as a core growth market for Jumbo, however additional costs (not to mention high rents, energy and interest rates) may force it to rein in expectations.
Such as the challenges of modern retailing, and van Veen and his colleagues will be keen to alleviate the cost burdens affecting the business, so it can get back to doing what it does best.
4. Decision Time In Belgium
Sticking with Belgium, Jumbo recently rolled back on its ambition to have 100 supermarkets in the country by 2027 – a deadline it had postponed previously – and some commentators are suggesting that this could be the year that it abandons its Belgian voyage altogether.
Back in December, RetailDetail's Pauline Neerman penned a column entitled 'Why Jumbo will leave Belgium in 2023', and these rumours haven't gone away – as Belgian retail expert Jorg Snoeck told RTL Nieuws earlier this month, Jumbo will need 60 or 70 stores to avoid making a loss in Belgium, and even if it opens ten stores as planned this year, it won't get anywhere near this threshold. It currently operates 28 stores in Belgium.
5. La Place And HEMA
Jumbo is proud of its La Place restaurant business, which it sees as a valuable addition to its portfolio – and last year saw it record a turnover almost in line with pre-pandemic trading (€107 million), having been forced to shutter restaurants as COVID-19 struck. It has also expanded the brand internationally, to Copenhagen airport and the Google campus in Sunnyvale, California.
Elsewhere, its HEMA shop-in-shop concept is also proving popular with customers, and is a valuable point of difference for the brand in an otherwise crowded market. We suspect that van Veen will be eager to pull what levers he can to double down on both.
© 2023 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.