A-brands lose market share

This article on DutchNews.nl finds that Supermarket own brands in the Netherlands are becoming more popular, a trend that may well accelerate with the economic crisis:

Albert Heijn expensive in the absence of competition?

I have lived as an expat in the Netherlands for over five years now, and had also spent significant periods in Germany, Belgium and the UK before coming here. It has regularly occurred to me that some products are grossly more expensive at Dutch supermarket chain Albert Heijn than in other EU member states, and this article will explain why I pose the question in the header of the article.

Case in point, my neighbor recently purchased a top-of-the-range Apple Macbook Pro during a business trip to the UK, paying £1,949.00. Had he made the purchase here instead, he would have parted with 2,499 EUR. At the current exchange rate this is £2,355, equating to £385 extra, a 15% premium. I appreciate that the exchange rate is favorable, but not that favorable! The same holds true for software, with Office 2008 for Mac costing him around £80 from Amazon.co.uk, conversely on sale at Schiphol airport for 130 EUR.

It was after my neighbor recounted this that I decided to compare the costs of more commonly-bought items. I started with UK supermarket Tesco, and Albert Heijn here in the Netherlands. With approximately 30% market share, Albert Heijn is comparable with Tesco since it is the dominant player in its home market. You may either download a PDF version of the results, or alternatively select a cell in the embedded spreadsheet below, and then use the arrow keys on your keyboard to navigate through the 130 rows.

Again, there are 64 items in the list above, even if you only see a handful. I'm sorry for the lack of a vertical scrollbar, but if you select any item and use the arrow keys on your keyboard, you can scroll down. However, again, for your convenience:

PDF version

Please note that the prices are indicative only of a 'snapshot' taken on 1 day, and I do not intend to update these figures, so please consider them within that context. Wherever Tesco did not have a comparable quantity of a product, I aligned with the Albert Heijn quantity, calculating based on Tesco's cost per litre or kilogram as indicated on their web site.

Notwithstanding these caveats, I did try to select products from all sections of the supermarket to better represent a diverse shopping trip and to allow for a reasonably credible result. If either Albert Heijn or Tesco had a temporary offer on a product, I excluded this and instead used the standard price.
  • Overall 59 items out of 64 were cheaper at Tesco
  • My bill at Tesco would be 115.96 EUR, compared with 177.52 EUR for the same shopping basket at Albert Heijn, a near 35% differential
  • Meats are generally more expensive in the Netherlands, as are imported dairy produce, pet food, toiletries, vitamins, batteries and even Dutch Gouda cheese is cheaper in the UK

Global congolmerate Ahold owns Albert Heijn chain, is majority owner of C1000, which is being integrated into the former chain, and in late 2006 also received the blessing of Dutch Competition Authority the NMa to purchase 29 stores from the Konmar chain. Whilst there were caveats to that approval with some stores being sold off, is a strong competitive regime genuinely promoted? For instance, one could hardly argue that C1000 was a minor competitior, reporting revenues 40% of those of Albert Heijn in 2007, and cited as having a 15% market share, 472 stores and 32,000 employees in 2004.

Dutch News and Expatica report that a number of people have lodged complaints against the domination of Albert Heijn in their areas. We come to expect if companies are given the opportunity, they will make every effort to avoid competition to the detriment of the consumer. However, those of us from other countries have witness competition authorities taking substantive steps to promote or even enforce compeition to the benefit of the consumer. Perhaps the Dutch population is so fond of and trusting of big business, that the NMa would consider the cultivation of a cut-throat competitive supermarket sector to be nothing short of unpatriotic!

Amusing context on the 'Evil Sport' of Grocery Shopping

Having only recently commenced this blog, and with no prior intention for it to extend beyond the single 'founding article', I came across this amusing article which readers may enjoy: