Any company wanting its product to be included in Albert Heijn’s weekly bonus action had better have deep pockets.
Suppliers pay the country’s largest supermarket chain a minimum of €14,250 to be included in the weekly list of discounted goods, according to a new investigation. A featured spot in the brochure will set them back €50,000.
And, in the end, it is the consumer who pays for Albert Heijn’s bonus sales, broadcaster RTL Z warned on Friday. The higher costs to the supplier are often passed down the line, it said.
RTL Z based its story on a copy of the supermarket’s fees list it claims it obtained. All customers are eligible for the free AH bonus card for these promotional prices.
Albert Heijn makes its money not only on supermarket sales, but also on its weekly discounting specials, said Jan-Willem Grievink director of the FoodService Instituut Nederland. ‘If a supplier wants to be included in a weekly bonus action, he has to pay for it,’ Grievink explained to RTL Z.
Even though they are not required to participate in an AH bonus action, experienced suppliers do so. Albert Heijn has a strong market position, so it is worthwhile to join in, several suppliers told RTL Z.
Prices can escalate because suppliers also pay for highly visible selling points in each supermarket. Inclusion in AH’s radio, TV or internet ad campaigns boost the total spend even more. The top price is reportedly €223,000.
According to the report, Albert Heijn normally makes a 30% profit on sales of all items. But it reduces its profit margin to about 20% if the product is in a bonus sale. If a bonus product is sold for 50% less, typically Albert Heijn will pay 10%, the supplier 40%.
Grievink says ‘sales are two, three, four, maybe five times those in a normal week.’ In the longer term, discount actions strengthen the brand, he said.
A spokesperson for Albert Heijn told the broadcaster that its suppliers are ‘happy with these additional revenue opportunities’ and that they involve costs for the supermarket chain too.
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