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Albert Heijn launches in Flanders

Dutch supermarket chain could spark price war

The arrival of Albert Heijn is expected to upset the local supermarket industry, which is currently dominated by Delhaize, Colruyt and Carrefour. Ahold is not yet releasing any details of its strategy for expanding into Belgium, but some industry experts estimate a total of 200 stores might be achievable. According to Gino Van Ossel, retail specialist at Vlerick Management School, the arrival of Albert Heijn could have a greater impact than the arrival of German deep-discounter Lidl in the 1970s.

Albert Heijn dominates the Dutch market, with a market share of nearly 33%, compared to 26% for Delhaize, the market leader in Belgium. The company is known for selling products at low prices as loss-leaders. In the past, it has sold large bottles of Coca- Cola for a few cents as a means of attracting families to do all their shopping in the store, although this policy has been investigated by competition regulators. As a result, Dutch supermarkets are extremely price sensitive, with brand names suffering the most as supermarket chains force them to offer advantageous price deals as the cost of a presence in their stores.

Ahold will, however, find Belgium a quite different market, Van Ossel warned. Belgian supermarkets take on a major burden of real estate because shoppers demand parking on a larger scale than the Dutch.

The new store will take the place of a local supermarket on the Hoogboomsteenweg in Brasschaat and be operated as a franchise, along the lines of many Delhaize City and Carrefour Express supermarkets in Belgium. It will be supplied from Albert Heijn's distribution centre in Tilburg, with the product range adapted to local requirements. The store, occupying 1,200 square metres and employing 40 staff, will open in March following a complete renovation.

The death was announced last week of Albert Heijn, grandson of the founder of the supermarket chain and former chairman of the board. He was 83 and suffering from post-polio syndrome, a disorder of the
central nervous system. He is credited with the introduction of the modern supermarket concept to the Netherlands, as well as playing a role in the introduction of bar codes to speed up checkout.

Lidl, meanwhile, has been fined €27,500 by a Ghent court for misleading advertising. The chain advertised several products, including ink cartridges and men's underwear that were not stocked in many stores. Lidl was also ordered by a court in Brussels to pay €35,000 to consumer organisation Test- Aankoop for the misuse of test results in advertising. Lidl had used the organisation's Best Buy seal, awarded for individual products, to advertise unrelated products.

(January 19, 2011)