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Netherlands: Action turnover rises 27 percent

Discount Non-food Retail Chain Action (owned by 3i group) sees that consumers buy much more at their stores due to the high inflation, as consumers pay even more attention to the price. And the higher energy prices are also beneficial for the chain, because households buy more electric heaters and slippers, for example.

In the first nine months of the year, consumers across Europe bought no less than EUR 6.1 billion (US$ 6.1Bn) worth of goods from Action. That is 27 percent more than the 4.8 billion euros (US$ 4.8Bn) in the same period a year earlier.

By paying close attention to costs, the chain was able to increase its profit before deduction of interest, taxes and depreciation by 35 percent to more than 1 billion euros.

'Concept fits great in this day and age'

Retail expert Fred Rutgers is not surprised that Action is growing so fast. "It's a concept that fits great in this day and age." According to him, people find it more difficult to make ends meet and therefore want to save money.

"In addition, Action is getting an increasingly better offer," said Rutgers. Due to the large turnover, they have great purchasing power, he says, "and that makes brands bend their knees to supply Action after all. Action benefits from that."

Action also responds well to the emotions of consumers, says Rutgers. Customers almost come out with their message as if they were holding a trophy. "Look what a world deal I have scored. That gives people a good feeling. I think Action will continue to grow strongly for the time being."

Detergent, toilet paper, candles and throws

"We see an increase in daily groceries such as detergent, soap, toilet paper and kitchen rolls that is up to 30 percent higher than in previous years," CEO Hajir Hajji said of sales growth in the year so far.

Due to the high energy prices, electric heaters, candles, throws, slippers and batteries are also flying out the door.

Ten countries

Incidentally, it is no longer just the Dutch who buy from Action. There are now 2,178 stores with 'Action' on the front in a number of European countries. Since the opening of the 2000th store at the beginning of this year, that number has increased by 178. Action wants to increase the number of stores much further. Now at least the opening of another 32 stores in the near future is certain.

There are now more than 400 branches in the Netherlands. And in Belgium, Luxembourg, Germany, France, Poland, the Czech Republic, Austria, Italy and Spain there are a total of 1800.

Due to the success of Action, the retail chain is worth a lot of money. British 3i has increased the value of its 52.7 percent stake in Action from nearly £7.1 billion to more than £8.6 billion. This means that Action as a whole was valued at 18.6 billion euros at the end of September. That is 20 percent more than at the end of March.

This made an investment in Action much more rewarding than an investment in shares. The AEX actually fell by more than 11 percent between the end of March and the end of September. Action is now worth more than listed companies such as ABN Amro, Philips, ASMI or NN.

Pay raise

Action employees benefit from the smooth running of the business. They will receive a 10% increase in wages next year. Of this, 8 percent is structural and 2 percent is non-recurring. This means that this one-off wage increase will no longer apply in 2024, unless new agreements are made about this later. Employees will receive a one-off payment next month. For Dutch employees, this is 350 euros net (US$350).

Sustainable cotton and wood

For some people Action had the image of cheap stuff that is not so durable. But Action wants to change that. For example, it wants to sell only products made from sustainable cotton processed cotton by the end of next year. That is two years earlier than originally planned.

And in 2024 it only wants products that contain fully sustainable wood. That is a year earlier than previously thought.


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