	March 2010

	IN THE STORES Albert Heijn in The Netherlands announced plans to offer only sustainable private label products by 2015
	MARKET RESEARCH Most shoppers don’t look at nutritional labels
	PLMA NEWS Trade Show offers new education programme
	EVENTS

Discount brand leads turnaround for Tesco

Tesco says the introduction of its discount brand last year has been “tremendously successful” and been responsible for slowing down the market share gains by Aldi and Lidl in the UK. ”Prior to the launch of the discount brand, Aldi and Lidl were among the fastest-growing retailers in the UK and were certainly stealing market share off Tesco,” Laurie McIlwee, Tesco’s Chief Financial Officer, told Lebensmittel Zietung.

   “You can almost see a decline in their growth charts from day one of our launch,” he added. “Remember that we have learned a lot from competing with Aldi and Lidl around Europe. We have also exported the Discount brand range to our stores in Eastern Europe where it has been equally successful in competing with them.”
   While the new brand may have lowered profit margins, the Tesco executive believes the sacrifice is worthwhile. “It is better to have a pound of sales on a lower margin than not have a pound at all.”
   He sees Aldi and Lidl as the biggest competitive threat over the last year. “All our main competitors run a very similar operation to our own. So, if we work more efficiently than the other major multiples, we’ll win. But, when you come up against somebody like Aldi and Lidl with a very different operating model, you have to ask yourself whether you need to do something differently.”

Leclerc and Système U build their brands

   Two of the biggest retailers in France, Leclerc and Système U, are relying on their private label programmes to attract value-conscious shoppers and defend against the expansion of hard discounters.
   Leclerc reported that sales of its La Marque Repère brand are booming, up more than 10% from last year, and now account for 40% of the retailer’s consumer goods volume and 33% of value share. The brand is an important part of its successful low-price strategy that has been responsible for the retailer’s market share in France climbing to 17% last year, according to TNS WorldPanel.
   Système U plans to meet the discounter challenge by raising the quality of its economy private label range, Bien Vu, to meet or exceed that of Lidl, Serge Papin, President, told LSA magazine. This year, Système U will be spending less on advertising and promotions will be more targeted. The company will make more efforts to standardise its promotional resources at a national level. Papin said that the retailer’s stores now cover half of France and eventually will expand throughout the entire country.

German supermarkets gain market share

   Supermarkets in Germany finally stopped the market share gains made by discounters. Market researcher GfK reports that supermarket’s market share advanced for the first time in several years in 2009. The gain, which was slight, put supermarket market share at 23.7% of the 150 billion euro food market.
   Discounters still remain the dominant format in Germany. There currently are more than 16,000 discount stores across the country, and they account for nearly half (46%) of the food market. Every household in Germany is said to be within 10 minutes of a discounter by car.
   The supermarket gains come as the biggest retailers, Edeka and Rewe, are upgrading their stores with more services and broader assortments. However these retailers are not relying solely on supermarkets for their future success; they are looking to expand their own discount operations.
   Wolfgang Twardawa, food specialist for the GfK, predicts these discounters, which include Penny and the newly merged Plus and Netto group owned by Edeka, will emerge as major competitors to Aldi and Lidl.
   GfK data shows that while Aldi remains the clear leader, its market share declined slightly to 18.4% last year, while its closest discount rival, Lidl, was virtually unchanged at 9.8%.

EC approves new organic food logo

The European Commission has selected a new design logo to appear on all organic food and beverage products in the EU. The design is comprised of twelve stars in the shape of a leaf.
The logo will be compulsory on new organic products as of 1 July 2010, but industry has until 1 January 2012 before labels on all existing products need to be changed. National, regional, or retailer brands will be allowed to appear on packaging alongside the common EU logo.

Private label strategies in India

   With Carrefour, Tesco and Wal-Mart knocking on the door to enter the country, the question arises: How can private label reach its potential in India’s emerging retail food market?
   This strategic issue was examined in a special presentation at one of the country’s most important industry conferences, Food Forum India 2010, held in Mumbai earlier this month. Food Forum is one of the country’s premiere exhibitions and trade shows. It was sponsored by Progressive Grocer India, a leading monthly business publication.
   The presentation, “Private Label, Differentiation & Challenges,” featured a panel of retailers from Europe, North America and India. The panel was moderated by Brian Sharoff, President, PLMA, which helped organise the session.
   Participating in the panel were Joop Elderhorst, General Manager, International Buying, SPAR International; Tom Stephens, formerly Vice President, Loblaws, Canada; Damodar Mall, Group Customer Director, Future Group; Shiv Murth, Chief Operating Officer, ABRL (Real), and DV Ramkumar, Vice President, Spencer’s.

New regulations for UK retailers

Supermarkets in the UK must now comply with a new Grocery Supplier Code of Practice, which will be included in all retailers’ contracts with their suppliers. The code applies to 10 retailers with a grocery turnover of more than £1bn a year. The code aims to protect suppliers from being asked for unexpected and retrospective payments, or from being asked to cover the cost of theft.
Retailers must keep written records of all agreements with suppliers on terms and conditions of supply. Supermarkets must also enter into binding arbitration to resolve any dispute with a supplier.

Private label pays off for Waitrose

   Waitrose in the UK says its strong financial performance during the past year can be attributed to the success of its Essentials range introduced a year ago. Managing Director Mark Price says the range of 1,400 items now accounts for 13% of Waitrose sales and has led shoppers to add an average of two extra items to their basket on each visit.
   Price believes that Essentials gave shoppers the confidence to do their full grocery shop at Waitrose, rather than merely buying quality items for special occasions at the grocer. The line is being extended to include several premium products such as foie gras, blue fin tuna, Kobe beef, and lobster.
   Waitrose has also launched a top-end range, Menu From, offering a selection of up to 68 dishes, all of which require little or no preparation to cook.

Sales and profits up for McBride

McBride, one of Europe’s biggest makers of private label household goods, has posted sharply higher first-half profit, boosted by strong demand in France and for personal care products. The company also was positive about sales and profits for the second half of the year. McBride, which supplies retailers like Tesco and Carrefour, said operating profit before one-off items climbed 85% to £26.5m in the six months to 31 December as consumers continued to defect from big-brand products.

Private label executive named Hemköp president

A change in senior management at Hemköp in Sweden signals more growth for private label for the retailer. The company’s new President is Ola Andersson, who since January 2009 has been head of private label products for ICA, the Swedish retailer owned by Ahold. Hemköp is part of the Axfood group, which owns more than 225 stores under several banners.

Sainsbury’s revamps Be Good to Yourself

Sainsbury’s has re-launched its ‘Be Good to Yourself’ range with new products, packaging and recipes. The products include ready meals, snacks, bakery items and chilled desserts. The range has nutritional standards for fat, saturated fat, sugar and salt to ensure the products have 30% less fat than their standard equivalent or contain less than 3% fat overall.

Colruyt expands foodservice

Colruyt is expanding in the foodservice business with the acquisition of the Foodinvest Group in Bornem, Belgium. Colruyt aims to expand by supplying food products to the hotel and catering industry and the social catering business (rest homes, hospitals and company restaurants). Foodinvest is said to be the third largest foodservice supplier in Belgium with a turnover of 45 million euros.

IN THE STORES

Albert Heijn in The Netherlands announced plans to offer only sustainable private label products by 2015.

Tesco is trialling the One-Stop banner at forecourts in two of its large UK stores. A range of One-Stop products has also been introduced. Tesco has 440 forecourt stores attached to its large superstores.

Carrefour is offering new discounts through its loyalty card scheme in France. Launching a campaign called “Celebrate the anniversary of the loyalty card” offers savings of up to 50%, with the majority of offers involving a 30% discount.

Conad in Italy has launched Conad Kids, a range for children aged between six and ten.

Asda is trialling a range of chilled gluten-free and wheat-free pizzas and garlic bread.

Carrefour plans to invest more than 1.4b euros in Brazil in the next two years to open stores, while Casino has sold all of its 26 Leader Price stores in Argentina.

UK online grocery retailer Ocado plans to add over 500 items to its economy Everyday brand.

Schlecker plans to close around 500 conventional Schlecker stores in Germany this year.

SPAR UK’s wine sales increased 10% in 2009, following a revamp of the company’s private label range.

Swiss cooperative buying group Markant Syntrade and Portuguese EuromadiPort have joined EMD, the European sourcing alliance.

Alliance Boots is entering into partnership with Swedish firm Farmacevtföretagarna to open Boots branded stores in the country.

MARKET RESEARCH

Most shoppers don’t look at nutritional labels

   Less than one-third of European consumers look for nutrition labels when shopping, according to a new study by the European Food Information Council (EUFIC) published in the Journal of Public Health.
   The survey of consumers in the UK, Sweden, France, Germany, Poland and Hungary tested awareness of nutrition labels in six product categories: Breakfast cereals, soft drinks, confectionery, ready meals, salty snacks and yoghurts. Researchers recorded whether or not shoppers looked for nutritional information before selecting the product.
   Only 17% of shoppers searched for nutritional information and researchers found wide variations in different countries and product categories.

PLMA NEWS

Trade Show offers new education programme

   PLMA’s “World of Private Label Trade Show”, to be held 18-19 May in Amsterdam, features a new executive education programme, seminars on industry issues and the largest number of exhibitors ever. All the events will be at the RAI Exhibition Centre. The education programme, to be held on 16-17 May, covers a range of industry topics and is offered in multiple languages. The courses are taught by both academic instructors and industry professionals. For more information about attending, click here.
   The seminar session will be held on the afternoon of 17 May, after the education classes conclude. Seminar speakers are Serge Papin President of Système U, the French retailer that has revitalised its private label offerings; Lu Ann Williams, Head of Research of Innova Market Insights, a company that specialises in new product development and innovation, and Xavier Durieu, Secretary General of Eurocommerce, who will report on an EU initiative that could have an impact on retailer brands.
   The PLMA Trade Show exhibition will be the biggest ever, with more than 3,200 exhibit stands including 40 national and regional pavilions. Manufacturers from 70 countries will show their new products and packaging innovations.
   For more information on attending PLMA’s 2010 “World of Private Label”, please contact the PLMA International Council: conferences@plma.nl.

EVENTS

16-17 May	Executive Education Programme Amsterdam
18-19 May	“World of Private Label” Trade Show Amsterdam
14-16 November	U.S. Private Label Trade Show Chicago
8-10 December	Shanghai Private Label Fair Shanghai

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