Apostolos Vakakis, head of the Jumbo group, rang a bell for the geopolitical turmoil and the economic downturn, on the sidelines of the company’s General Meeting. However, he categorically stated that he is not willing to pay “a single cent more” than the price he has agreed upon, bearing transportation costs that he will then have to either absorb or pass on to consumers.
Mr. Vakakis explained that he is not going to pay the cost of a transition period to the detriment of the consumer considering that the tension in the Middle East is temporary. So, as he said, he will wait until the end of March to reassess the situation. In order to achieve this, of course, it will be based on the reserves that the company has.
As in the pandemic, Jumbo seems to have sufficient products in its warehouses so that it does not need to take upfront measures like other companies. In addition, it exhibits durability. In 2023 it achieved a turnover increase of 14% from 12% which was its target, despite the adverse effects of the flood in Thessaly in 2 stores and also the challenges for its Israeli partners due to the war.
The penguin syndrome
Mr. Vakakis considers that the three months (until March) is sufficient time to weigh the risks and opportunities that emerge from this crisis. Even if developments are unfavorable, such as e.g. in the event of an escalation of the crisis in the Middle East, he plans to be the last to follow suit. He describes this strategy as “the penguin syndrome”. When the glaciers end and the penguins start the journey to find food in the sea they flock to the coast. But they are reluctant to fall into the water, as whales and seals lurk. All this, until one brave penguin dares, only to be followed by a few hundred thousand others. Mr. Vakakis sees himself among the last penguins, who are also the luckiest since in the meantime the wild sea animals will have had enough…
“We will be the last to raise prices,” he stressed.
In favor of the seven-day operation
It should be noted that Mr. Vakakis was in favor of the seven-day operation of the stores, the head of Jumbo, Apostolos Vakakis, was placed on the sidelines of the company’s general meeting. He believes that this will be to the benefit of consumers and therefore they are the only ones who should be questioned. He added that, of the four countries in which the company has a presence, Greece is the only one where the stores do not work on Sundays.
Increase investment
For 2024, the Jumbo group predicts sales growth of 8-12% with a balanced growth in profitability and a 50% increase in investments compared to 2022, with a focus on the development of warehouses and the purchase of stores mainly in Romania and Cyprus.
It is worth noting that the message that the crisis in the Middle East is temporary also comes from Jumbo’s partners in Israel, who have active expansion plans. The first store opened in March 2023 by the Fox Group, as part of a commercial franchise partnership with the Jumbo group, is currently operating at approximately 65% capacity.
Jumbo through partnerships, apart from Israel, has a presence with stores bearing its brand in North Macedonia with 5 points, in Albania with 8, in Kosovo with 6, in Serbia with 5, in Bosnia with 6 and in Montenegro with 2 .
In Greece, the development strategy now depends on the movements of the competition. The 2-3 stores in three years is a pace that will continue, based on the management of the group and in any case the interest is focused on increasing productivity and efficiency.
George Alexakis
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