Netherlands: Regular supermarkets want discounters as neighbours'

Updated: Aug 11

Discount Retail Chain Budget Food (privately owned) recently opened another store, this time in Heerenveen. Customers can now visit the store full of food and non-food products that often originate from national flows, offered for a much lower rate than regular supermarkets sell. We speak to Maarten Muller, general manager and founder of the company, after a time when many parties were unable to sell their products due to the corona crisis. “Suddenly other parties from the catering industry also reported to us.”


Muller founded the discounter in 2014 together with Jaap van Vuure, who is also an AH franchiser in Callantsoog. The discounter now stands at thirteen stores throughout the country, and the company is running well, according to the director. “At the moment, the formula is growing as desired. When the catering industry had to close its doors, we received many applications for wine, soft drinks and other catering-related products. It was a very busy period for us. Unfortunately, the margin on products such as canned food and toilet paper fell sharply because they were difficult to deliver and therefore had to be purchased for more money. We do want a complete range, so we were forced to buy it for a more expensive price.” Corona also changed a lot for Budget Food in the consumer field. “Over the past year and a half, the corona period, we have seen that consumers know where to find us. You saw and see that in every store that sells food. Now everything is back in stock and the shelves are full. Manufacturers are now able to find us faster and faster to get rid of leftovers. In addition, our buyers also call producers," says the founder.


Expansion

According to Muller, Budget Food is a growing company: “We have opened several stores in the past year. In Heerenveen, the first Budget Food compact store took up a building, this formula does not have refrigerated and frozen products. In Maastricht we transformed a shop into our standard. In the first quarter of this year, we opened our own distribution center in Middenmeer. That's our only DC. We have also moved our headquarters there. We first outsourced the distribution to a logistics partner, now we do it ourselves. We have rented a large space, accept goods here and distribute it among the stores. We now also do order picking ourselves.” Strikingly enough, not a single store is located in a large town in the Randstad. “We look throughout the Netherlands for vacant properties that are suitable for the formula, it doesn't matter where. If we find a suitable interpretation, we take it,” says Muller. He does not say anything about whether the organization aims to open a certain number of stores. “I'm not going to say anything about that yet. We look at it per store. Only one at a time.” There are also no plans for expansion abroad, according to him: “Never say never, but there are still so many opportunities within the Netherlands. We can continue here for the time being.”


Pallets

The director says that shop visits have changed in recent years. “We started with about 450 articles. Customers had to take it out of boxes, which were on pallets. Now that is no longer the case and we have a nice range, consisting of 2,000 SKUs. We have had a private label house brand 'Everyday' for three quarters of a year, which was set up in collaboration with the Belgian Colruyt. That is going very well.” Should other supermarkets fear the expansion of Budget Food?


Muller: “We only hear positive comments from the supermarkets. They just want us to be their neighbours. Consumers get cheap products such as chips and cola from us, and they get the rest from a large gritter. It interacts.”


See here for more: https://www.levensmiddelenkrant.nl/levensmiddelenkrant/ondernemers/reguliere-supermarkten-willen-ons-juist-als-buurman-hebben