Action’s turnover topped a billion euros for the first time last year. In recent years more and more stores of the Dutch chain have opened in Belgium. They are a hit with the locals. “They are great for browsing and because of the cheap prices you always find something you want” retail experts say.
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Action is Belgium’s fastest growing chain store: what’s its secret?
Colin Clapson
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Action is booming in Belgium. In 2015 the chain boasted 116 stores in Belgium. Today their number has risen to 2014. Figures contained in a report from retail expert Gondola show turnover of 409 million euros in 2015 has more than doubled to 1.098 billion last year.
“A 168% growth in turnover is gigantic" says Gondola’s Silvie Vanhout. “It’s largely explained by the increased number of stores, but turnover per square metre has also risen too!”
So what is Action’s recipe for success: “It’s a great store for browsing” says Vanhout. “You enter in search of two items and easily leave with five or six”.
Impulse purchases provide shoppers with a happy feeling and their prices don’t punch a hole in your purse.
Els Breugelmans, lecturer in marketing at Leuven University, points to the constant change in Action’s range: “It means shopping Is always a surprise. Combine that with the low prices and Action is an interesting store for many people”.
Action is a no-frills retailer and in this way distinguishes itself from other retailers just like Aldi did so many years ago. Action isn’t a supermarket where you head to buy food. It’s described as a 'near-food-retailer'. There is a limited selection of food products, but most of the shelves are filled by cheap, useful gadgets like brushes for the washing up (at 42 cents a go) and soap dispensers in the shape of Father Christmas.
Silvie Vanhout notes Action tries to match its cheap prices by a cheap business model too. “In stores the emphasis is on functionality and reducing costs: these are no frills stores, situated at cheap locations and with few staff”.
The chain operates on an integrated model. None of the stores are franchises but all form part of the same company. Management is centralised and everything is directed from the centre.
Hajir Haji is the company’s CEO. A Dutch national of Moroccan extraction, at the age of 17 she started as a shelf filler. Today she is the boss of a chain of 2,300 stores across eleven countries. She is sticking with the approach of the company’s founders, Gerard and Boris Deen: keep costs as low as possible.
Action’s business model is hard to follow for regular supermarket chains. In a traditional supermarket you expect to find all products and most brands. That’s not the case at Acton, where the range depends on the deals their buyers have been able to make.
“Customers accept this from Action, because that is what they know to expect. Traditional supermarkets can’t get away with that and need to have all products on their shelves, even if prices of the minute are too high” says Breugelmans.
Action is not only doing well in competition against regular supermarkets, but also against online stores. As it thrives on impulse purchases that require in-store browsing an online store isn’t the biggest asset. Here Action faces an added difficulty because the web shop needs to be constantly updated due to the frequent change in the range.
“This could lead to unhappy customers” warns Breugelmans “because some products may no longer be available online, while you can still find them in a physical Action shop”.
Still, Action can’t afford to ignore online shopping all together and offers a limited number of products at discount prices every week, while detailing availability.