Collateral damage: AH actie discount on pans

 Edition 28 September 2017, by Bárbara Luque

Albert Heijn has been dragging down a third party while trying to help its clients save a couple of bucks on cookware. Who are the economical victims of this supermarket chain’s discount on pans? The savings campaign runs simply: every client receives a sticker for each € 10 spent. After having collected a total of sixty stickers, he or she is able to exchange them, plus a certain amount of money, for a discounted pan of the German manufacturer Villeroy & Boch’s catalogue. Although this might represent a win for the costumer, there are a couple of losers to consider in the equation with BK Cookware, Royal Delft’s subsidiary, as the most economically hurt.

After many costumers bought said discounted pans, cookware manufacturers understood that it was acting at the expense of their sales. This came as no surprise to Henk Schouten, chief executive of Royal Delft, who predicted the outcome since the start of the AH actie. “The market is not suddenly growing, so we’re going to notice that somehow,” Schouten said in March, adding that all other pan manufacturers would notice the same downfall in sales given the circumstances where the market isn’t getting bigger, Tefal being one of them.

BK Cookware, important team player for the oldest listed company in the Netherlands, saw its sales collapse from 8.7 million euros in the first half of 2016 to 6.4 million in the first semester of 2017. Royal Delft’s Topman expressed no doubt in the immediate cause of this loss “Half of this decline was due to the Albert Heijn actie”. Market behavior from earlier years would sustain his statement, “In the months of action, Villeroy & Boch sold more than 3 million pans. The German company suddenly had 50 percent of the market, while it is normally hardly active in the Netherlands”, Schouten said.

Although this merges as a new cause for Royal Delft’s sales decline, it is not the first time that companies face this scenario due to Albert Heijn’s discount campaigns. In August 2016, a case was known where restaurant owners called for a boycott of the actie, after they saw themselves paying for said discounts. “Or you’re losing because the cost per meal exceeds the return, or you’re losing because your neighbor does participate in the action. For restaurants, this is terrible”, expressed one of the entrepreneurs. This leaves owners with the tough decision of choosing between a boost in clients but less revenue, or less clients and even less sales.

Regarding Royal Delft’s situation, their Topman isn’t entirely sure how much of a negative outcome they will face at the end, “It’s the first time that such a big party has a sparing action with pans,” he said. On the other hand, there are a few manufacturers that even after finding a slight decrease in sales, aren’t too worried about it, as they like to relay on their quality. “The sale of cheaper pans fell back, but the more expensive did not suffer from Albert Heijn. If people want real quality they will come to the specialty store and do not save those stamps”, said Ria Schipper from the local cooking outlet Kookpunt, to AD Newspaper. Whatever the case may be, there isn’t doubt that at the end clients are the only beneficiaries of Albert Heijn’s discount acties, making it clear that these campaigns represent a large stretch for companies, who are forced to make a vast economical effort tomaintain their consumers happy.