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Han Ploegmakers: consolidation of retail not yet at an end

"Netherlands: "Success of Lidl's fruit and vegetable department a result of iron discipline"

Although there were very few people from the fruit and vegetable sector present at the Horti Fair, Han Ploegmakers was interviewed about the supermarket landscape. The former Jumbo buyer now works independently for, for instance, Smeding and Plus Supermarkten. He was asked whether or not it was right for growers to blame the supermarkets for taking the whole margin.

"The fact of the matter is that not enough is earned in some parts of the chain. But the price is decided by the supply and demand. The supermarket barely has any influence in the latter and that ratio has gone out of balance," says Ploegmakers. "Costs are the other component, but growers remains responsible for that themselves. I think it is unfair to blame the supermarkets for that."

Although the fruit and vegetable department is often seen as the most profitable part of the supermarket, Han says this is not the case. "There are product groups with higher margins and product groups with higher turnovers. Fruit and vegetables is not the highest. The profit on the turnover of the fruit and vegetable department is important, but not most important. You have costs due to losses etc, which aren't in the DKW group." Han says the real boost in convenience products is gone, but there are always possibilities in the market to make children eat more fruit and more easily.

The retail man says growers working directly with supermarkets is a logical step. "The interests are rising due to the enlarging of the scale. My vision is one of a closed chain. That doesn't necessarily mean that links have to be taken out, as long as they add value. Shortening the chain isn't a goal in itself." Ploegmakers says the fruit and vegetable prices in the Dutch supermarkets being lower than abroad is due to the fact that Holland is a transit port for import products.

Han explains the success of his previous employer by saying that company always looks through the eyes of the customer. The 2% discount demand that was made recently by two retailers he calls sad. "You shouldn't change the rules during the game. You have to discuss that. You always need to keep talking."

"A retailer like Lidl has been scoring the best with fruit and vegetables for three years. They take a good look at the chain and have a discipline from management to shop floor that many colleagues are jealous of. But you shouldn't forget that a discounter like Lidl is working more closely with growers already than we might think."

Ploegmakers doesn't believe that the consolidation in the retail channel is over. "There are still 23 formulas being run in Holland by around 20 retail organisation. There will certainly be more consolidation, but I don't know how fast."

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