Belgian retailer Colruyt has said it expects net profit in the financial year ending in March to remain flat, due to margin pressure from food inflation and poor consumer sentiment.

Speaking at the group’s AGM yesterday, CEO Jef Colryt told shareholders the company’s profits were being squeezed between higher costs, which the company has been unable to pass on due to weak consumer sentiment and a competitive environment.

“We are perfectly conscious that external influences will also determine our course. I think of the increasing prices of raw materials, which we can only partially on-charge to the consumers as well as the wage indexing and steep energy prices that weigh on our cost structure. All these factors against the background of a price-competitive climate with a decreasing consumer market and an uncertain socio-economic context result in a feeling of uncertainty about the future and prompt us to be careful when announcing an outlook,” he said.

Nevertheless, Colryt was quick to emphasise the group’s success over the previous year, when profit rose 1.8%. “It is entirely clear that Colruyt Group has covered a successful round in a challenging socio-economic climate,” he insisted.