Laurus draws a line under difficult 2004

Related tags Laurus Supermarket Retailing Better

Dutch retailer Laurus will be glad to see the back of 2004, a year
which saw it struggle with widespread restructuring and a damaging
price war. But 2005 is not guaranteed to be any easier, as the hard
work of rebuilding its business from the stores up becomes the top
priority. Chris Jones reports.

The company, which is partially owned by France's Casino group, reported sales of €3.4 billion in 2004, down 9.5 per cent on the previous year, with all of its three main banners posting disappointing results, Like-for-like sales at the Edah, Super de Boer and Konmar fascias were down 8.2 compared to the previous year, largely as a result of the price war with Albert Heijn, the leading supermarket chain owned by Ahold.

Laurus has made little secret of its troubles in recent years, and analysts had expected to see a decline in sales, not least because the restructuring of the company's store portfolio was begun too late in 2004 to have a major impact on sales.

Just how important sales from the new-look stores are was clear from the dreadful performance of the old-style outlets. Laurus is in the process of converting all its Edah supermarkets into a new Edah Lekker & Laag format (named after a smaller chain acquired by the group in 2000), and the 40 converted stores performed much better than those yet to be upgraded, although the company declined to give details of the relative sales performances.

The situation at the Super de Boer chain was marginally better, with old-style stores performing better than the Edah outlets which are yet to be converted, with a particularly good Christmas performance.

As for Konmar, there are signs of recovery, according to Laurus but "the evidence is not yet strong enough to be convincing"​ the company said. The chain is being remodelled as an EDLP (every day low prices) operator, with the first pilot store due to open in the first quarter of the year, but it remains to be seen whether this will help it improve in 2005.

In an oblique admission that it had got the basics wrong, Laurus said that " the success of any retail format depends to a large extent on its operation at store level - the most important elements of which are clean stores, fresh produce, a comprehensive product range, no long queues at the checkouts and 'service with a smile' - and Laurus will strongly focus on improving its store operation in 2005."

The company has set aside around €263-273 million to revamp its stores from the bottom up, with the lion's share going to Edah (€114 million), followed by Super de Boer (€79 million) and Konmar (€70-80 million).

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