Delhaize losing customers as a result of spat with Unilever: survey

Posted by Daniel Palmer on 17th February 2009

A decision by Belgian supermarket Delhaize to freeze orders of about 250 products from consumer products giant Unilever is starting have an impact on their sales, according to a survey by Belgian-based Brandhome.

Unilever and Delhaize, Belgium’s second largest supermarket operator, failed to come to terms regarding price and the in-store promotion of products earlier this month, with Delhaize admitting that the relationship was “tense”. Unilever said they were asking for a price increase of around 2.5%, but Delhaize insisted that Unilever’s demands would result in the price of some products rising by around 30%. The Belgian supermarket chain also claimed that Unilever were requesting unpopular brands to remain on their shelves.

As a result Delhaize suspended the purchasing of around 250 products from Unilever, despite concerns that consumers may turn to other supermarkets if a number of popular brands disappeared from the shelves.

A survey released last night confirmed that shoppers were disillusioned by the decision, as 31% of Delhaize customers have shopped elsewhere to obtain Unilever products. Of those remaining loyal to Delhaize, around half (47%) had turned to an alternative brand, with the remaining half purchasing Delhaize’s own-label alternative (39%) or buying products on special (12%).

Additionally, 83 per cent of those surveyed said they had purchased Unilever products before, 12% were unsure and 5% said they never had. Dove, Lipton and Knorr (soup) are among popular Unilever brands sold in Belgium.

“It is damaging for the image of both Delhaize and Unilever in Belgium. The only winners are rival retailers… and rival brand manufacturers,” Eric Saelens, Strategic Director at Brandhome, said. “Customers need to choose now: a store change or a brand change.”