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This week we hear from Caroline Stout, Country Manager for Advantage Belgium, to understand how COVID-19 is impacting life and retail in the country.

Q1 - What is the prevalence of COVID-19 in Belgium, and what are the major measures being taken at a government level?

The coronavirus was first confirmed to have spread to Belgium on February 4th, when a Belgian national, upon returning from Wuhan to Brussels, tested positive for the COVID-19 virus. Transmission within Belgium was then confirmed in early March at the end of the school holidays and around the carnival period. At this time, many tourists, who were returning from Northern Italy, went back to work or school, leading to an epidemic with a rapid increase in cases.

Effective March 13th, Belgium announced a lockdown and ordered the closure of schools, discos, cafes and restaurants.  Public gatherings for sporting, cultural or festive purposes were cancelled, non-essential travel was prohibited, and non-essential shops were closed.

These strict confinement measures will remain in place until May 3rd, at the earliest. If circumstances permit, from May 4th, Belgium will begin to phase out these measures.

Q2 - How is this impacting retail, and how have Belgium manufacturers and retailers reacted?

In Belgium, shopper habits have followed a pattern similar to that observed in other countries.

The impact of the lockdown on shopper behaviour has been massive. Even before the lockdown, traffic in shops increased. Customers were buying essential items like toilet paper, hand soap, rice, pasta, etc. Most retailers and manufacturers were not prepared for this peak in demand which subsequently hit their entire supply chain. Additionally, shops needed to re-organize in order to be able to follow the safety instructions and make sure products were getting onto shelves. Most retailers sent their HQ staff to shops or warehouses in order to get the job done. Even personnel of sister companies (e.g. Dreamland of Colruyt) started working for the supermarkets. Several retailers are also taking financial measures to cover the extra costs of this crisis.

Nielsen calculated that in the week before the lockdown, supermarket sales increased by 45% due to the stocking up of essential products. In the first week of the lockdown, sales increased by an additional 37.5%.  Despite these increased sales in supermarkets, big CPG players in the market are facing huge turnover loss due to the closing of their professional and foodservice channels and events. Retailers with a big focus on B2C, such as Sligro and Metro are also suffering.

To relieve some of the pressure on grocery personnel, the government prohibited all promotions as of March 18th.  This led to a price increase of around 6.6% for some shops (Test-aankoop, the Belgian consumer organization). Starting March 31st, planned promotions were allowed again, but retailers reacted differently to this. For example, Delhaize installed a solidarity action giving a 5% discount over several weeks, while others simply restarted their promotions.

In terms of shopper habits, several studies show that people are buying brands they know along with fresher and higher quality products. If they need to stay at home, they want the best for themselves. Store visits are more planned than before as people want to reduce shopping time and people shop closer to home. Home-delivery services and pre-ordering of groceries have also increased significantly in the last few months.

Q3 - How are manufacturers and retailers stepping up to support the country?

All retailers implemented a wide range of safety measures for their staff, suppliers and clients. Plexiglass shields were installed relatively quickly at check-outs to keep the cashiers safe. Shopping trolleys are disinfected before going in-store and sometimes you need to follow a certain route around the store. Retailers are creative and working together with other companies to create a safe shopping trip. Carrefour has tested and will even install a disinfection tunnel at hypermarkets.

Focus on the supply chain remains important and business is very slowly getting back to normal. Manufacturers still work closely with retailers to help them with store deliveries by installing a direct delivery and mixed pallet service.

Additionally, retailers and manufacturers have set up initiatives for community and business support:

  • Colruyt and Delhaize (two of the biggest food retailers in Belgium) are pooling resources to support our health workers. They have made an agreement to deliver groceries to the hospitals so they don’t need to shop after their long working days.
  • In several cities, a special priority card for health workers was developed to skip the line at shops and get priority at checkouts.
  • Breweries and alcoholic beverage suppliers have shifted part of their production to hand sanitizing gels and have set up several initiatives to support the on-trade channel (e.g. cancelling rent, taking back stock, free cleaning of tap installations and several pay-it-forward initiatives where you pay for your beer now and get it once the pub is open again).
  • Delhaize has partnered with Decathlon to start selling some of their top items in Delhaize stores.
  • Many other initiatives were taken by manufacturers and retailers, such as donating laptops to Digital for Youth to help children in need and donating food, special gifts and deliveries to health workers.

Belgium has shown during this Covid-19 crisis that “L’Union fait la force” – “Eendracht maakt macht” – “Einigkeit macht stark” – (Strength lies in unity), a slogan created at the time of independence in 1830, is still relevant today.