2023-08-04 13:06:31
What’s really stuck?
Previously, in the agreement to be able to use the Delhaize logo, independent operators paid a single flat rate for marketing, transport and supply costs. Except that in the new agreement offered to prospective buyers, this is no longer the case. Delhaize wants to puncture 4% of monthly turnover and also imposes a profit margin of 20%. This means, for example, that if a franchisee buys an egg for 1 euro from Delhaize, he can sell it for a maximum of 1.20 euro in the store.
The new franchisee will also have to obtain 95% of their supplies via the lion brand’s central purchasing office. However, it is on the products that he buys, negotiates himself with for example local producers that the independent can make interesting margins.
Delhaize maintains that the model is profitable…
Many prospective buyers doubt a model that can be profitable because, beyond the brand use agreement, future franchisees are under a legal obligation to take over all the staff and this, under the same salary conditions as when the store still belonged to the group.
And that’s where many feel they can’t keep up with the change because staff costs in integrated stores represent between 16 and 24% of costs, which is almost double for a freelancer who works with rotations of students the year. With a profit margin limited to 20%, high energy costs (and fridges full of shelves), rent and maintenance to pay, profitability is not guaranteed. Many independents, initially tempted by the adventure, gave up during discussions.
Difficult to obtain this information, many prospective buyers explain to us that they are still in the race for a possible takeover. They signed a confidentiality clause which does not allow them to express themselves freely on the subject. No photos, no copies possible. The activity information on each store can be consulted in a “saferoom” from which nothing can come out.
Delhaize management maintains its plans, its strategy and indicates that 400 candidates are still in negotiations to take over the 128 so-called integrated stores. A number of potential buyers never revealed so far, perhaps to create competition between them.
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