In ten years' time, Albert Heijn has evolved in Flanders from an unusual newcomer to a fully-fledged omnichannel food retailer that wants to be a driving force in the field of better food, value for money and digitalisation. "We are perfectly on track.”
A two-way learning process
On 16 March it will be exactly ten years since the first Belgian Albert Heijn opened its doors, in Brasschaat. There was a lot of scepticism at the start, but the success has turned out to be greater than many had expected. What were the most important lessons? We look back and forward with CEO Marit van Egmond and with country manager Belgium Raf Van den Heuvel, who was there from day one.
"I've often planned to write a book about what we went through during that time," he laughs. "It has been a fantastic journey in which an incredible amount has happened. We also learned a lot from it. Of course, we had done our homework: at the start, we had a good mix between the Belgian and the Dutch assortment, but you see that over the years you start to refine it. You get a better grip on the balance: what do Belgians like from the Netherlands, what should we expand, and where should we add the Belgian touch? You also see it in the customers you attract. We now have a much larger network: soon we will have sixty stores. People used to come to the first store in Brasschaat as an outing, to see what Albert Heijn has to offer. Today, you can see that we have grown into a supermarket where you do your everyday shopping. This is the direction in which we are continuing."
That learning process was also a two-way street, by the way, Marit van Egmond indicates: "I have been at Albert Heijn myself for 24 years now, so I have also followed those ten years in Belgium closely. In those ten years when we got to know each other better, a lot of great developments came from Belgium to the Netherlands. One of the most appealing examples is perhaps the range of special beers. We have now embraced that in the Netherlands as well, and the Belgium team has helped a lot with that. Those beers now adorn a beautiful place on the Dutch shelves."
Growing with entrepreneurs
The Belgian expansion was briefly interrupted by one major event: the merger between Ahold and Delhaize, which meant, among other things, that the group had to dispose of a few shops. How has the cooperation evolved since then? There are still two separate head offices, but that is quite normal, thinks van Egmond: "We have more separate companies within the group, think of bol.com, Etos, Gall & Gall... So we are used to working with more local brands.
A remarkable conclusion after those ten years is that Albert Heijn and Delhaize have become very complementary retail formulas, which can literally coexist. "Willebroek is a fantastic example," agrees Van den Heuvel. "Literally across the street, the Delhaize entrepreneur has opened an Albert Heijn there. He is very satisfied with both banners: he proudly wears the Delhaize sign but is also very enthusiastic about Albert Heijn. He even asks me to add a second store already. I feel that appetite in all entrepreneurs I speak to: 'we want to grow! It's very nice to be able to work with entrepreneurs in that way." Does this mean the start of possibly even more Delhaize entrepreneurs opening an Albert Heijn? "That is certainly possible. But other entrepreneurs will also follow. We are now opening our sixtieth store, in Merchtem. Our XL in Mechelen will open at the end of this year. We still see quite a bit of growth potential with our entrepreneurs."
"Because we have been present in Belgium for ten years now, entrepreneurs see the power of Albert Heijn," van Egmond thinks. "They have embraced us, just as many Flemings have embraced Albert Heijn. Everyone wants more: us, the entrepreneurs, the customers...".
One of the big changes Albert Heijn has caused in Belgium is its promotion policy: spectacular 1+1 offers were unseen ten years ago. It is part of the retailer's strategy, which is built on three major spearheads, says Marit van Egmond.
"Firstly, it is about better food: fresh, more varied, healthier and more sustainable. The second spearhead is 'value for money'. That has been in our DNA for a long time. That is why we have the Price Favourites, which are also very visible at Albert Heijn Belgium. Our Bonus offers are also very important in this respect. We like to surprise customers with great offers and promotions, in all sorts of different ways. That's what's unique about Albert Heijn: that we have both a very competitively priced range that is very qualitative, and those very nice offers that are sometimes very surprising and sometimes very sharp."
The third priority is technology and digitalisation. "It is great to see how we have built this up: from one shop ten years ago, we are now an omni-channel food retailer in Belgium as well, with not only supermarkets but also pick-up points, delivery, XL shops... And we announced a fortnight ago that we will also bring the unmanned AH to go shops to Belgium. This means that all the good things Albert Heijn has to offer are also available in Flanders."
Not yet across the language border
The ambition is to have one hundred shops in Belgium. The counter will reach sixty this week. How long will it take to reach the hundred mark? "We have set a good pace," thinks Van den Heuvel. "Even in the special year 2020, we continued to invest despite the challenges and still opened nine shops. So we are perfectly on track." Eight to ten shops a year, that's the rhythm? "For me, it can always be faster, I like a good challenge, but you also have to get it all done."
Albert Heijn now has 25 company-owned stores and 35 franchised shops owned by 13 entrepreneurs - including Merchtem - in Belgium. The retailer believes this is a good mix: it provides the best of both worlds. "There is a huge appetite from the entrepreneurial world to invest, so we are happy to take advantage of that." But the company is not ruling out new branches of its own.
We do talk about Albert Heijn Belgium, but in practice the territory has so far been limited to Flanders. There are a few shops on the language border that also receive French-speaking customers, such as in Wemmel or Zaventem. Retailing experts are in complete agreement: AH will have to cross that language border at some point. Is that an option? Marit van Egmond does not want to rule anything out, but: "We focus on where we can grow. We can also grow in the Netherlands: we have just announced that we want to acquire a large part of Deen - that is still subject to approval - and that will mean an additional 39 shops. We also see plenty of opportunities for growth in the Flemish part of Belgium."
Raf Van den Heuvel adds: "If you look at the province of Flemish Brabant, for example: we are not yet in Leuven. The entire periphery around Brussels, including its southern edge... let's first build up a good representation there. There is still plenty in the pipeline."
Citrus fruit and full trolleys
Naturally, the retailer is drawing important lessons from the corona crisis. Marit van Egmond points to the enormous growth in the use of self-scan and electronic payments. "People no longer want to pay with coins. We have made a great leap forward in this respect. We have also seen an increase in food awareness: how people view the role of food in their own health. We see this, for example, in the increase in sales of citrus fruits and fruit salads. Awareness of food and drink may have been present in Belgium for some time - we have learned that. With my Albert Heijn heart, I think it is fantastic to see how more people are becoming aware of this, how important it is to eat well, to enjoy this, and to take good care of yourself. Corona has certainly made that top of mind for a lot more people.
Raf Van den Heuvel finds the image of the fuller carts characteristic: "I see customers who consciously choose Albert Heijn as their supermarket where they can find everything at once: on the one hand the special range, on the other hand also the everyday products at competitive prices."
Raf Van den Heuvel concludes: "My daughter was born in 2014 and has therefore never known a life without Albert Heijn. That is a big difference with the generations before her. I am convinced that Albert Heijn will be a familiar brand on the streets of Flanders for generations to come. That is a fine legacy to leave behind. Look at the position of that brand in the Netherlands: we are also building it in Flanders. My daughter's generation will look at Albert Heijn as a part of everyday life."