Industry and Government News
Two Retailers Leave Agecore Alliance

German Edeka and French Intermarché have confirmed they are stepping out of the international buying alliance, Agecore. The two retailers make up more than 60% of the alliance which otherwise consists of Belgian Colruyt, Swiss Coop, Italian Conad and Spanish Eroski.

One of the reasons for Edeka’s withdrawal would be that it is unhappy with the fact that while its company represents 40% of the combined total sales, all six members have an equal vote. Edeka is said to now bet on Everest, its recently formed purchasing organization with Dutch online retailer Picnic. In Everest, Edeka has a decisive vote, Picnic is just a minority partner. Interestingly, Everest is headed by former Agecore leader Gianluigi Ferrari.

In France, Intermarché is accused of abuse of power via its international purchasing centres by the Ministry of Economy and faces heavy fines. This could partly explain the company’s departure from Agecore. The retailer has just signed a new alliance within France with Casino.

Meanwhile, the future of Agecore, which had a combined turnover of almost 170 billion euros, remains uncertain.

 

Spar Austria New Market Leader

For the first time in history, Spar secured a leadership position in Austria with 34.6% market share, overtaking rival Rewe. The retailer gained 1.8% share and achieved sales growth of 16%, well above the market average of 10%. Spar grew its store numbers to 1,578 last year and invested strongly in the expansion of its logistic centres.

The retailer’s ambition doesn’t stop at the Austrian borders. “Spar Austria wants to become the best retail company in Central Europe” said CEO Fritz Poppmeier to Lebensmittel Zeitung. In Hungary, with a 2.1 billion euros gross turnover and in Slovenia, with 733 million euros, the company is the number two. In Croatia, the company is the third retailer with a turnover of 733 million euro.
Carrefour Expands Abroad

Carrefour is starting the integration of the 172 stores that it acquired from Supersol in Spain, now that it has the approval of the Competition authorities. The stores are mainly located in Andalusia and Madrid and they will be converted to Carrefour’s Express, Market and Supeco banners this year.

With the acquisition, Carrefour accelerates its growth strategy in Spain and at the same time diversifies its store network with a stronger presence in the proximity channel.

Across the Atlantic, Carrefour has bought Grupo Big Brasil, the third largest food retailer in Brazil. The agreement comprises 387 stores and the retailer is valued at approximately 1.1 billion euros. The deal strengthens Carrefour’s leadership in Brazil. The two retailers have strong geographic complementarity. Carrefour can, thus, extend its presence in regions where it has limited penetration. The retailer plans to convert Grupo Big’s stores to its Atacadão, Sam’s Club and Carrefour hypermarket banners.

The two groups have combined sales of around 153 million euros, operate 876 stores and employ around 137,000 people.

Migros Introduces Sustainability Scale

Switzerland’s largest retailer Migros is adding a sustainability rating to its own brand products. The so-called M-Check evaluates several sustainability categories like animal welfare and climate and gives products a star rating on a scale from 1 to 5. According to the retailer, the M-Check will create transparency for its customers.

So far, over 100 products have been provided with the label. Migros aims that all food and non-food own brands should have the new sustainability rating by 2025, this corresponds to around 80% of the retailer’s range.

The market leader grew its market share with 1.2 percentage points to 23.3% in the country and it recorded a turnover growth of 4.4 percent to about € 27 billion last year.

 

Amazon Expands Prime Now and Fresh

Amazon is expanding its grocery delivery service Prime Now in Germany and Spain. In Germany, the internet giant closed a partnership with retailer Tegut and is rolling out the service to the greater Frankfurt area. In Spain, it works with DIA and added Zaragoza to the seven other cities where it offers grocery delivery.

In Italy, Amazon has introduced its Amazon Fresh delivery service in Milan. In Spain, it started the service in Barcelona. The company expects to expand Amazon Fresh, which includes a same-day delivery option, to other cities in Italy and Spain in the coming months. In addition, Amazon is expanding in the UK, with the Fresh service now also available outside of London and the South of England.

 

Marks & Spencer Widens Online Reach

British retailer Marks & Spencer is going to launch websites in 46 new markets in a bet to revive its international business. The company said the expansion into nations from Nepal to Bolivia and Uzbekistan would extend its online reach to more than 100 countries in a cost-effective way.

The company has seen strong online growth since the pandemic, with e-commerce sales up 75%. It has created an “adaptable” website platform designed for international sales. The online channels have been translated into ten additional languages and currencies and orders will be fulfilled using the existing M&S distribution network. The push will allow the retailer to “explore underlying demand in these markets without significant upfront investment,” international director Paul Friston said in a statement.

In the UK, Marks & Spencer formed a joint venture with Ocado last year, making the full M&S Food range of 6,000 products, and 800 M&S everyday clothing and home lines available online through the Ocado platform.

 

Kaufland Grows in Eastern Europe

Schwarz-owned hypermarket operator Kaufland tripled the growth rate in its priority markets Romania and Poland last year. It was able to achieve a profit that was more than twice as high as the profit of any other hypermarket chain in the region.

The retailer is increasing the pace of expansion in Romania and opened 14 new hypermarkets last year. It is the biggest retailer in the country in terms of turnover, with close to EUR 2.5 billion in sales in 2019. With over 15,000 employees, it is one of the largest employers in Romania.

In Poland, it opened 12 new stores, including seven stores that it took over from Tesco. In addition, Kaufland expands its online offer from eleven to 17 cities in the country through the partnership with fast deliverer Everli. Orders can be placed 7 days a week with the option to have it delivered in three hours. Orders are processed in-store and delivered to customers within eight kilometers.

 

Iceland launches convenience format

Frozen foods retailer Iceland launched a new store format called ‘Swift’ in the UK. The first store was opened last month in the city of Newcastle and it is an entirely new concept, designed to provide a simple, easy-to-shop food store with the buzzwords “Fast. Fresh. Local.”

The convenience store is located in a former Iceland store in a high-footfall area. The new layout provided for three aisles, where there were two, allowing to double the number of SKUs to 3000. Where in the traditional Iceland stores the focus is on frozen, the new format emphasises fresh. Iceland says the novel layout breaks down the traditional barriers between frozen and chilled food to provide a complete range of meal solutions, with great breakfast, lunch and dinner meal deals.

Iceland’s new convenience format Swift could eventually become a competitor alongside the likes of Tesco Express, Sainsbury’s Local and Aldi Local.

 

Gorillas' Faster Than You

Gorillas, the German startup that operates a chain of dark stores that offer fast grocery delivery in residential areas, has a motto of “Faster Than You.” In addition to offering super-fast delivery, it is also expanding fast: In a little over ten months, Gorillas has expanded to more than twelve cities, including Amsterdam, London and Munich, and built up more than 40 micro fulfilment centres.

The company’s service is available in Germany, the Netherlands and the UK and is expected to launch in France any time soon. Gorillas’ app gives customers access to more than 2000 essential items at retail prices in only 10 minutes.

Gorillas, which was founded less than a year ago, raised a 244 million euros round of funding last month. Its valuation currently exceeds one billion dollars, which already gives it the status of unicorn. The company is considering introducing a private label.

 

In the stores

Aldi Nord is gearing up for international business and has given its central management company Aldi Purchasing an SE structure. Many employees with special know-how are recruited for this.

Mercadona’s own brand Hacendado America Filter coffee has been awarded an innovation award by the Spanish Cerdà institute.

Lidl has announced a 12% increase in turnover for 2020 in Luxembourg. Pandemic restrictions caused a decline in footfall but an increase in sales.

Albert Heijn is putting an end to the sale of strawberries that do not come from the Netherlands through a long-term collaboration with growers in the country. From now on, it will only sell Dutch strawberries.

Carrefour is announcing the deployment of a weekly silent hour on Mondays, from 2 p.m. to 3 p.m. in more than 1,240 stores. This hour is intended for people with autism disorder, but also for all customers who want to shop in a silent setting.

Caprabo has renewed the image of the “Caprabo rapid” banner in Italy. From now on, its supermarkets will carry the corporate logo of the company and the “rapid” in lower case, maintaining the traditional blue color of Caprabo.

Continente introduced a new range of vegetarian products under the name ‘Powered by Plants’ in Portugal.

Lidl Denmark has added a function to its loyalty app that sends recipe suggestions to consumers derived from shopping behavior. Software with artificial intelligence in the form of machine learning calculates who gets which recipes.

Mercadona expands its own brand assortment of snacks and chocolates on the shelves with the collaboration of seven local suppliers. It’s adding new flavors of crisps and different varieties of sweets.

Aldi UK swaps plastic straws for cardboard on all own-label drinks cartons. The new recyclable paper version made from FSC-certified cardboard would see 70 million plastic straws a year removed from circulation.

Italy’s Gruppo VéGé has entered into a partnership agreement with Glovo aimed at reducing the home delivery time for shopping to just 40 minutes.

Coop Denmark has announced that it has introduced vertically grown salads in 35 large-format Irma stores in Copenhagen.

Aldi Belgium is the first discounter to introduce stricter rules for its suppliers on the use of water when growing fruit and vegetables. The retailer wants to use water more efficiently worldwide.

Jumbo started selling dinner boxes put together by two-star chef Soenil Bahadoer in The Netherlands. The dishes can be prepared within 15 minutes and consist exclusively of pure and fresh ingredients. The range includes hamburgers, nuggets and meatballs with a meat flavor and made exclusively from vegetable protein.

In a supermarket first, Waitrose will start replacing coffee capsules with a home compostable alternative, saving millions of capsules from landfill. The capsules are made from bio-sourced materials, including sunflower seed bark and sugars derived from corn. The lid is made from cellulose and can also be home-composted.

E.Leclerc is launching "The Basics", kits of hygiene products for less than 8 euros allowing at least one month of use.

K Group was the only large operator in the Finnish grocery trade to increase its market share in 2020. It’s market share grew by 0.4 percentage points, and now stands at 36.9%.

Carrefour Spain will increase the number of customers who are member of its loyalty program by more than 20%. The Carrefour Club, with 7.4 million members currently, is the largest customer program in Spanish retail.

European retail organisation EuroCommerce will see its Director-General Christian Verschueren stand down from his post later this year.

Lenta, the third-largest chain in Russia, plans to double in size in the next five years by opening hundreds of small format stores and buying up smaller rivals.

Lidl has set up a foreign company for Bosnia and Herzegovina. So far, no other European retailer is represented in this country.

 

Market research
State of Grocery Retail 2021

The "Disruption and Uncertainty – State of Grocery Retail 2021" report, published by McKinsey & Company and EuroCommerce, takes a comprehensive look at the long term-trends and effects of the pandemic on the European grocery industry.

The report identifies four key trends that will shape the industry over the next years. These are based on the areas consumers intend to spend more money on and what CEOs see as the top industry-shaping trends with the majority expecting an increased focus on adjusting to shoppers who want variety, value and online.

The report features analyses based on consumer research in 10 countries and a survey among 48 retail industry leaders. Articles focus on trends and are complemented by in-depth interviews with C-level executives from different parts of Europe.

 

Cooking from Scratch is Popular

A survey of 1,200 conducted by shopper insights agency Shoppercentric in the UK found that 35% of the younger demographic (18-24 year old) have been cooking more from scratch than pre-pandemic, whilst 26% have started or are doing more batch cooking. It is also the age group that is most likely to have started doing more home baking and they have been consuming more fresh fruit and vegetables than any other age group.

Looking across all age groups, cooking from scratch has also increased: almost a quarter (24%) cook or eat healthier meals and a similar number do more home baking. In addition, getting takeaways via click and collect has seen growth: from 29% in May last year to 42% now, and home delivery of takeaways has risen from 45% in May to 56% now.

 

PLMA News
Private Label Maintains Strong Position Across Europe

Retailer brands sustained their market share position above 30% in all but two of the eighteen European countries surveyed by Nielsen in 2020 for PLMA’s 2021 International Private Label Yearbook. Nearly half of the countries reached market shares above 40%, whereas the majority showed a positive market penetration.

According to Nielsen’s data, Fresh & Frozen, Dairy and Health & Beauty are the top 3 product categories registering highest growth among the 18 countries.

“While taking account of multiple interruptions and ambiguities amidst the pandemic,” commented PLMA President Peggy Davies “the statistics for 2020 are an affirmation of consumers’ continuing trust in retailer brands.”

 

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