Things are not going well for Colruyt. The Halle based supermarket group faced red figures last Wednesday 15 December after an underwhelming Christmas report and promptly lost half a billion euros in market value. Their management refers to phenomena such as rising inflation, rising prices and problems in the supply chain as the main causes for its current situation. At the same time, analysts believe that the post-lockdown era was not sufficiently anticipated while the family-owned group is blamed for investing too much in sectors and companies that are far from its core business; among others, the takeover of fitness chain JIMS, the entry into bike shop Bike Republic and even the squinting at customers of the recently declared bankrupt Vlaamse Energieleverancier.

However, from a brand strategy point of view, there is also a lot to be noted that could explain Colruyt’s waning status. For instance, it seems as if the supermarket has remained stagnant where competitors did evolve and that it has lost touch with consumers at the same time. The Boni mayonnaise of yesteryear no longer catches on.

Colruyt was able to grow in the local market for decades because it went to consumers with a straightforward premise: the best brands and strong private labels at the lowest price. If a customer found that particular jar of peanut butter or bottle of detergent cheaper elsewhere, the infamous red phone would do whatever it took to refund you the difference and adjust prices – at least if they weren’t already doing so proactively after scanning prices and promotions at competitors. In return, that same Colruyt customer had to expect, above all, not too much frills. A shopping experience stripped down to its essentials with a bizarre checkout system, poorly manoeuvring trolleys and a retail environment more reminiscent of walking around in a warehouse than of family fun shopping became part of our collective memory.

As a popular supermarket, for a long time Colruyt thus filled the gap between the premium supermarkets where it is pleasant to be walking around and innovation is paramount, on the one hand, and the pure discounters with exotic brands and their inferior image, on the other. For a long time, those who wanted quality brands at the best price easily found their way to the orange-coloured supermarket with the sector’s biggest checkout tickets. Consumers returned home satisfied in the belief that they were smarter than their neighbours and never paid a penny too much for a full trolley of quality groceries.

Today, however, Colruyt seems to be making the same crucial mistakes as the defunct Dutch retailer Blokker. From a gold mine, this retailer too quickly turned into a frumpy seller of pots and pans that focused so much on margins that it seemed to forget it also had customers. Whereas Blokker let challengers such as Action and ever-advancing e-commerce take the advantage, while losing more and more touch with its customers, Colruyt seems to have failed to establish an attractive and valuable brand positioning in today’s supermarket landscape. What does the Colruyt brand stand for today? No consumer to articulate it clearly.

Colruyt seems to have failed to establish an attractive and valuable brand positioning in today's supermarket landscape.

Retail chains such as Delhaize, Albert Heijn and Carrefour are fully committed to innovation and take a clear position based on a clear brand purpose that matches the motives and values of their target audience. The Aldi’s and Lidl’s of this world are no longer the drab discounters that seem to date from an Eastern Bloc past and are investing in a high-quality offering that knows how to appeal to its own segment with a hip story that goes beyond just the low price. Everyone seems to have understood that today’s customer is no longer the customer of yesteryear, except Colruyt.

As a brand, Colruyt remains abandoned in the competitive landscape. The price-centric narrative of yesteryear is no longer a guarantee of success. Battling openly with suppliers, resulting in empty shelves, more and more consumers are raising their eyebrows. The e-commerce story around Collishop did not prove a profitable success and was disbanded in times when even less digitally mature customers are finding their way to the web. And above all: walking into a Colruyt outlet increasingly resembles a trip on a time machine towards the nineties of last century. The customer no longer feels smarter than his neighbour, but rather a plaything of a brand that no longer knows what to do either. Meanwhile, instead of intervening, Colruyt is starting to look more like an investment vehicle that prefers to pump money into expanding rather than evolving its core business and connecting with demanding consumers.

In addition to taking the advice of economists and stock market analysts to heart, it is recommended for Colruyt to give serious thought to a brand strategy that transcends the success formula of bygone days and fully engages with today’s value-driven and experience-oriented customer.