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Jumbo Plans 100 Foodmarkt City Stores

Dutch retailer Jumbo plans to open 100 of its new format Foodmarkt City stores in the coming years, reports Dutch magazine Distrifood. Jumbo’s CEO Fritz van Eerd asked at a real estate exhibition for proposals for suitable locations. The first new concept store was opened in late May in Groningen, the largest city in the North of the Netherlands.

Foodmarkt City combines features of Jumbo’s Foodmarkt big-box concept with foodservice elements of the acquired La Place chain. Primarily it targets customers looking for food to go and is geared to a lesser extent to daily shopping needs. A highlight of the stores are its freshly prepared meals that can be eaten immediately or taken home. The retailer has also developed more than 500 new products for these stores, including sandwiches, fresh cold-pressed juices and pastries and these will also be partly introduced to around 20 Jumbo supermarkets.

Opinion

An Ambitious Plan

Jumbo’s new store format fits perfectly with its intent to renew its focus on fresh produce and customer service. Squeezed by the mighty Ahold Delhaize (Albert Heijn) on one side and price aggressive Lidl on the other, Jumbo needs to find new ways to sustain its growth and differentiate itself from competitors.

In other Central Western European countries, convenience store expansion has been slow. Even though Foodmarkt City is not a traditional convenience store, it shows a similar approach as it targets customers on the go and is likely to be located in high traffic locations. We have already seen many ambitious plans of convenience store operators that failed to translate into real success stories. Often, expansion targets couldn’t be met as for German Rewe To Go (excluding forecourt stores), Billa To Go in Austria, ICA To Go in Sweden or Albert Hejin To Go in Germany.

Foodmarkt City’s concept might be a little bit different from the formats listed above. At around 550 square metres, the first outlet is much bigger than Albert Heijn To Go, which trades from an average size of 130 square metres, according to LZ Retailytics data. Also, the foodservice offer, which complements its convenience assortment, adds a new feature to the concept. However, even if this might be sufficient to differentiate the banner from its competition and bring new life to the Dutch retail market, the Netherlands remains close to saturation and available store locations are scarce. Market leader Albert Heijn not only operates supermarkets on every corner with a clear focus on fresh and food to go, but also more than 70 of the aforementioned Albert Heijn To Go stores.

We doubt that there would be room for 100 of these stores in the crowded Netherlands market unless Jumbo rebrands some of its existing supermarkets. It will be very hard for the retailer to find suitable locations as well as to compete with the omnipresent Albert Heijn. However, even though we are sceptical, it remains important to point out that if Jumbo managed to turn its plan into reality it would not be the first time the retailer surprised the industry. It already did so by acquiring C1000 and Super De Boer (both with a larger store count than Jumbo itself) and with the launch of its innovative Foodmarkt concept. However, this time it might be harder for the Dutch number two to achieve its ambitious targets.

With contributions from Senior Retail Analyst Denise Klug
Topics: Jumbo