Bankruptcy looms for 576 supermarkets
Belgium has a very high store density. With 3.08 stores per 10000 inhabitants, the density is substantially higher than in neighbouring countries France (2.92) or The Netherlands (2.53). Obviously this puts pressure on rate of sale for suppliers, but the fact is that Belgium has simply too many food outlets.
A study by Gondola and business data specialist Graydoncreditsafe shows that 1 in 6 supermarkets in food retail in our country have to fear bankruptcy. Almost half run into difficulties when an unexpected problem emerges.
Covid-19, the energy crisis, high inflation and razor-sharp competition are weighing heavily on Belgian supermarkets. The study shows that 46.2% of POS are in financial trouble when unexpected problems arise. “They are through their reserves and have no way of coping with a possible next crisis,” says Eric Van Den Broele of GraydonCreditsafe. For 16.2% of supermarkets (576), the situation is even worse: they have to fear bankruptcy as their financial situation is structurally bad.
With those figures, the retail sector is doing worse than the Belgian average. Moreover, supermarkets’ profit margin has fallen to an all-time low of 1.29%. The survey comes at a time when there is much turmoil surrounding Delhaize’s plans to spin off its 128 full-owned shops. The Belgian supermarket chain revealed that nearly 200 people are already interested in taking over the shops, but the question is whether interest in all 128 shops is equal. “The corporatisation of shops is perhaps understandable, but only a shifting of the problem,” Van Den Broele argues. “Two scenarios are possible: either we will get a lot of bankruptcies in the coming period, or there will be more takeovers and you will only get big players absorbing all the small ones.”