Retail turnover is currently taking a nosedive. The finding is reported in Le Soir on Friday based upon figures communicated by Comeos, which is raising “the alarm”.

The Retailers’ Federation says that within a little under two years, two-thirds of sales margins have entirely disappeared.

One of the factors which has played its part in the trend is the change in consumer behaviour.

For example, in 1980, Belgians devoted 22.2% of their purchasing power to food, drinks and tobacco, a percentage which had reduced to 15.35% by 2016. Within the same time period, expenditure on health, hotel and catering and communications climbed by 58%, 59% and 204% respectively.

Comeos is inferring, “Shopkeepers are now not succeeding in attracting as much purchasing power as they have before.” As a result, the entire retail sector, which employs more than a million Belgians, is now subject to price pressure.

Faced with pressure on profit margins, the majority of structured retail players are feeding the phenomenon, by engaging in a genuine price war to obtain the maximum market share.

Indeed it is the case with large-scale distribution, where the retail ‘cake’ is not getting any bigger. Here the five biggest retail suppliers (Colruyt, Carrefour, Delhaize, Aldi and Lidl) are fighting, through promotional campaigns, to increase their market share of it.

The hotel and catering sector is the branch of retail which is producing good results. The Retailers’ Federation has concluded this, stating that the sector has enjoyed annual growth of more than 3% in recent years.

Oscar Schneider

The Brussels Times