Supermarket retailers in Europe are facing a “perfect storm” as they find themselves trapped in an increasingly complex environment.
Retailers’ profit margins have always been tight, but rising costs, including energy, transport and labour, are putting an even greater strain on these businesses.
The rise of e-commerce has increased pressure on traditional chains, forcing them to invest heavily in digital platforms, logistics and home delivery services.
Supermarkets’ strategy shift
As a result, many retailers are seeking to streamline their operations through mergers and acquisitions, hoping to achieve economies of scale and strengthen their market position. On the other hand, consumers are becoming increasingly demanding, with higher expectations, demanding value for money, faster service and more sustainable practices.
In addition, they are adapting their store networks, closing less profitable stores in various locations and reassessing their physical presence as they try to meet the growing demand for online shopping. Like many other industries, retail is in a perma-crisis phase, with turmoil and disruption expected to continue.
These changes, however, are not limited to Europe. In the US, the deck is being shuffled as well. Recently, Kroger Co.’s $24.6 billion takeover of Albertsons Cos. failed: A court ruled that it would reduce competition for consumers, in a decision that is a gravestone for the deal.
Ahold Delhaize: Acquires Profi and Delfood
Ahold Delhaize recently completed the acquisition of Romanian food retailer Profi Rom Food SRL (Profi) from MidEuropa for 1.3 billion euros. The acquisition doubles Ahold Delhaize’s retail footprint in Romania, which currently operates nearly 1,000 stores under the Mega Image brand.
Profi operates 1,700 supermarkets and convenience stores. In the twelve months ended June 2024, its sales amounted to 2.7 billion euros.
Ahold Delhaize expects Profi to add approximately 3 billion EUR in net sales to the 2025 financial results but is expected to have a neutral impact on Ahold Delhaize’s underlying earnings per share in 2025.
The complementary strengths of Profi and Mega Image will enhance their ability to serve customers in both urban and rural areas, grow and offer more choice and value to Romanian consumers.
Ahold has made another acquisition: It announced that its brand, Delhaize, has reached an agreement with the Louis Delhaize group to acquire all shares in Delfood. This acquisition concerns 325 stores, logistics services and the head office in Belgium.
Delhaize CEO Xavier Piesvaux said that Delhaize wants to strengthen its position in the Belgian food retail market. “It’s also a nice nod to history because this deal brings together two companies with the same name and the same founding family, with a history of more than 150 years.”
Sainsbury’s: Expanding further in Scotland, England and Northern Ireland
In late August 2024, Sainsbury’s announced plans to expand and open a number of new stores in various locations across Scotland, England and Northern Ireland, in former Homebase stores.
The deal involves a plan to acquire 10 leasehold stores that will be converted into Sainsbury’s supermarkets. With the latest acquisition, the retailer will see almost 400,000 more consumers gain access to a Sainsbury’s supermarket, within a 10-minute drive.
Sainsbury’s has set a target of renovating 180 of its supermarkets and opening around 75 new local stores, implementing its three-year Next Level strategy, which began in 2024.
As part of its acquisition of stores or leasing more stores from other chains, Sainsbury’s has also acquired stores from the Italian Co-op, in areas where it does not have a significant presence. In particular, it completed the acquisition of a portfolio of 15 supermarkets and 7 hypermarkets from the Co-op.
Carrefour: Completes acquisition of Cora and Match brands
Last July, Carrefour completed the acquisition of the Cora and Match brands in France from the Louis Delhaize group. With this action, Carrefour consolidates its position in the French market, with 60 Cora supermarkets and 115 Match supermarkets, in the regions of Eastern and Northern France, where the company has historically had a small presence.
These stores represent approximately 2.4% of the food market share in France. The acquisition is valued at 1.05 billion euros and is Carrefour’s first major acquisition in two decades. The transaction was made in cash.
Sailing Group: Acquires ICA Gruppen’s Baltic Arm
Sailing Group, Denmark’s largest retailer, announced that it is acquiring Rimi Baltic Group, a subsidiary of Sweden’s ICA Gruppen, in a deal worth 1.3 billion euros (excluding debt). Rimi Baltic, which operates in Estonia, Latvia and Lithuania, operates 314 stores with 11,000 employees. According to ICA Gruppen, the Danish company will assume Rimi Baltic’s 0.5 billion euros in debt, which mainly consists of lease obligations. The deal is the largest in the history of the Salling Group.
Albertsons: Terminates Merger with Kroger
Albertsons has terminated its merger agreement with Kroger, worth 23.7 billion euros. after the Oregon District Court and the Washington state Supreme Court, King County, blocked the deal.
The Federal Trade Commission had argued during the three-week trial in Portland, Oregon, that the merger would eliminate competition between the two leading traditional grocery chains, leading to higher prices for shoppers and reduced bargaining power for unionized workers.
“Given recent federal and state court decisions to block our proposed merger with Kroger, we have made the difficult decision to terminate the merger agreement,” Albertsons CEO Vivek Sankaran said in a statement.
