	MAY 2008

	IN THE STORES Sainsbury’s, UK supermarket retailer, plans to double in nonfood business by 2010
	MARKET RESEARCH Big increase in ‘green’ new products
	PLMA NEWS Market share, retailing, product trends highlighted at “World of Private Label” seminars, 26 May in Amsterdam
	EVENTS

Lidl plans aggressive expansion in Europe and abroad

Lidl is mapping out aggressive expansion plans for Europe and abroad. Klaus Gehrig, head of the retailer’s parent company, Schwarz Group, told Lebensmittel Zeitung, that the discounter has already secured 60 locations for its entry into Switzerland next year and planning is also underway for expansion into Romania and Bulgaria.

   The executive believes there are opportunities in the international markets for both Lidl and Schwarz’ Kaufland hypermarket formats. The company is looking at regions such as Asia and Latin America as well as the United States, but there are not yet any plans for a market entry. Lidl managers have also been in Brazil and Argentina.
   Nearly 700 Lidl and Kaufland stores opened in the past year. “In Germany, this year, we will open our 3,000th store," said Gehrig. He believes in Germany there is a potential for 1,000 more Lidl stores.
   He expects competition to increase this year. The new owners of Plus discount stores are likely to invest heavily in improving the stores while Aldi will continue to expand across Europe. Lidl CEO Wilfried Oskierski added that the Aldi expansion abroad helps Lidl in new markets. “We’ll just present the business model of discounters together with Aldi.”

Tesco: International stores lead growth, add profits

   Tesco reports that its stores outside of the UK now account for the majority of its sales growth and are increasingly profitable. Total international sales grew by 25% last year, the retailer said, while trading profit was up by the same percentage. Sales in Asia climbed by 27%, while in Europe they were up by 24%.
   Tesco opened 6.2m sq ft of selling space in Europe and Asia in the past year, an increase of 15%. More than 60% of the group’s sales space is now overseas. Tesco has nearly 1,600 international stores, including about 500 hypermarkets, and plans to open 505 stores this year.
   “All our established markets are now profitable and with growing local scale, increasing store maturity and the benefits of new investment in the supply chain infrastructure, returns from our international operations are continuing to rise”, Tesco said.

France plans new retail regulations

The French government plans to present a competition bill to parliament this month designed to reform retail regulations. To counter rising food prices, the government has promised to relax certain rules. The bill will allow retailers to negotiate list prices with their suppliers and ease restrictions on store openings. One government official promised safeguards for suppliers, such as preserving a ban on retailers selling below cost-price, and a reduction to 60 days in the time limit for paying invoices.
In another move, a government proposal to introduce self-service for certain self-medication products could be in place by this summer. Around 200 products are believed to have been identified as suitable for self-selection in pharmacies. One French retailer, Leclerc, has been running TV commercials asking the French government to loosen its drug regulations.

EU delays organic logo

The European Commission has delayed the introduction of its organic logo, scheduled for 2009. The logo, which was first suggested by the EC in 2007, was designed to be compulsory on all organic products that are 95% or more organic and free of genetically modified organisms (GMO). However, a complaint by Aldi that the logo is too similar to its own organic symbol has caused plans for the EU logo to be delayed. The Commission has decided to launch a competition, open to all EU citizens, to design a new logo. This will replace the draft logo which has recently been circulated.

Metro changes private label in Real hypermarkets

Metro is revamping the private label programme for its Real hypermarkets as part of a new overall marketing strategy. The ‘Fine Food’, ‘Gut Neuburg’, ‘Sigma’, and Grunes Land’ brands will be replaced by the Real brand, according to published reports. The Tip brand will remain. The retailer expects to have 800 products under the Real name by the end of this year, including ranges under the Real Quality and Real Selection brands.
Metro’s new marketing strategy for Real also features price cuts for the 300 best selling food products and the 50 top nonfood products, supported by a daily TV marketing campaign starting this month. In addition, Real will be tailoring the product assortments in stores more closely to the needs of local shoppers.

Carrefour, Delhaize invest in Romania

   Two of Europe’s largest retailers, Carrefour and Delhaize, are expanding their operations in Romania.
   Carrefour is investing 6.3 million euros in rebranding its Romanian supermarkets, which will be completed soon. The company has allotted the budget for rebranding its 21 Artima supermarkets, which were acquired last year. The stores will probably operate under the Carrefour Express banner.
   Delhaize has acquired the Romanian supermarket retailer La Fourmi. Delhaize made the acquisition through its local subsidiary Mega Image, which runs 43 stores in Romania. Half of those outlets are located in Bucharest. The 14 stores will be converted to Mega Image supermarkets.

Rewe postpones premium range

Rewe in Germany has decided to postpone the launch of its first premium private label, named Rewe Exklusiv. There are currently 100 products being planned, positioned higher in quality and price than leading manufacturer brands, according to published reports.
Rewe last year launched its 400 SKU Rewe brand to replace various category labels, and in early 2008 introduced its Rewe Bio organic private label to replace the Füllhorn brand. Rewe Group’s partner in buying, Dohle’s Hit stores, launched a premium line named Hit Gourmet last autumn, a range which may be extended to 200 products.

Former Rewe executive joins Wal-Mart

Wal-Mart has named a former Rewe executive, Stephan Fanderl, to head up its new organisation for expanding into Russian and neighbouring countries. Fanderl has been appointed President, Emerging Markets-East. Fanderl was a board member and head of hypermarkets and supermarkets for Rewe Germany. Wal-Mart noted that Fanderl “successfully developed Rewe’s business in Germany and eight Eastern European countries.” Prior to Rewe, Fanderl held roles with Metro Holding in Germany and Poland.

Boots opens first stores in Norway

Alliance Boots has opened its first Boots the Chemist stores in Norway, converting seven Alliance Apotek pharmacies to the fascia. Over time, all Norwegian stores will be converted and other European countries are likely to follow suit. Executive Chairman Stefano Pessina said “Something we will really push is the Boots brand. Boots is known outside the UK but in reality it is not exploited at all. We want to roll it out in Europe. We have started in Norway.”

Eroski phases out Caprabo products

Spanish group Caprabo, which was acquired by Eroski last year, is introducing the Eroski private label in its stores, while phasing out its Caprabo brand products. The retailer also has created a new corporate identification “Caprabo with Eroski”, that is accompanied by the slogan “together we give you more”. The new motto will be rolled out across more than 320 stores in Cataluña and Madrid over the coming months, while all the remaining stores in other regions will be rebranded to the Eroski fascia.
The motto is designed to reflect the union between the two retailers and illustrate aspects such as competitive pricing, wide product ranges, customer service and product quality. A new logo, incorporating the identification will be introduced later.

International profits up at Casino

Casino reports that the profit margins from its international business were “moving towards” its margin level in France. “The profitability profile of international operations has improved significantly, reflecting the positive impact of remodelling the asset portfolio and improved margins”, Casino said. International sales also have been growing sharply.

Marks & Spencer invests in Central, Eastern Europe

Marks & Spencer has formed a joint-venture to help the UK retailer with its expansion plans in Central and Eastern Europe. M&S’ partner is COMS, a company that operates 13 stores in the Czech Republic, Slovakia, Latvia, and Lithuania. M&S Director of International Business, Carl Leaver, said “There is a great opportunity to open many more Marks & Spencer stores across Central and Eastern Europe”.

Rossmann to enter Albania

Rossmann, the drugstore retailer, has formed a subsidiary in Albania prior to its launch in the market. The first store is scheduled to open in Tirana this autumn. The subsidiary, named ‘Rossmann & Lala’, has been set up together with the Albanian football player Altin Lala.

IN THE STORES

Sainsbury’s, UK supermarket retailer, plans to double in nonfood business by 2010. Half of the company’s new store space in the next two years will be devoted to clothing, furniture, entertainment and kitchen appliances.

Carrefour has created a website to communicate with its 62,000 suppliers. Called CarrefourNet, the website is available in French, English and Spanish.

Aldi Süd’s Austrian branch Hofer will extend its ‘zurück zum Ursprung’ (‘back to the origins’) regional dairy private label, consisting of 20 SKUs with 50 varieties, into bakery products and, possibly in the mid-term, into meats and fruit.

Colruyt has opened a meat manufacturing site in Belgium. It is said to be the most environmentally friendly site of its kind in Europe.

Coop Switzerland’s e-commerce operation Coop@home has expanded its delivery service across the entire country.

Auchan has added new health and wellness areas to its Jumbo hypermarkets in Portugal.

X5 Group in Russia is launching a supermarket banner, Green Perekrestok. It will be developed from a combination of the current X5 supermarket banner, Perekrestok, and new store openings.

Kaufland in Germany has launched an umbrella private label for its wine range, named Cultura Vini. Under this banner, sub-brands indicate the various origins of the wines offered.

Axfood in Sweden plans to launch a range of organic products which will be available in stores by the end of the summer.

Casino has acquired a 90% stake in French textile company Intexa, which specialises in the design, manufacturing and printing of fabrics.

ICA in Sweden planning to test a supermarket format that includes significantly more fruit and vegetables, more chilled ready meals, and express shopping.

Homebase, a DIY retailer, has launched a line of electricals, including four products which carry the Good Housekeeping Seal of Approval.

In the Ukraine, Fozzy plans to open 35 supermarkets, 15 discount stores and two cash & carries.

MARKET RESEARCH

Big increase in ‘green’ new products

   There has been a significant increase in the number of new products claiming to be environmentally-friendly, according to Mintel’s Global New Products Database. In 2007, 328 new products carried this claim, representing a 200% increase, compared with the prior year. In 2002, Mintel’s global database recorded only five environmentally-friendly product launches across all sectors of industry.
   Consumers particularly look for eco-friendliness in certain sectors, including household paper products (66%) and energy efficient appliances (48%). GNPD’s global results show that 57% of consumers look for eco-friendliness when shopping for food, which has forced the sector to focus on the development of environmentally-friendly products.
   In Europe, 161 new products in the beverage sector claimed to be ‘environmentally-friendly’ or to have ‘environmentally-friendly packaging’ in 2007, compared with only 10 products in the prior year. More than 360 new food products in Europe carried these two claims in 2007, compared with only 37 products in 2006.

PLMA NEWS

Market share, retailing, product trends highlighted at “World of Private Label” seminars, 26 May in Amsterdam

   The “World of Private Label” trade show seminar programme presentations will offer new research data on private label’s market share across Europe as well as briefings on retail trends and new product development.
   Jonathan Banks of Nielsen will review market share data compiled by the company for PLMA’s 2008 International Private Label Yearbook, which covers retail sales in 18 countries and more than 3,800 product categories. “Retail Trends in Europe: Changes and Opportunities”, will be the subject of a presentation by Dr. Jurgen Elfers from Commerzbank. Lynn Dornblaser from Mintel will discuss the major new product trends in Europe and America.
   The seminar programme will be held from 14.00-16.00 on 26 May in the Forum Centre at the RAI Exhibition Centre in Amsterdam. The event is one day prior to the “World of Private Label” Trade Show, which will be held on 27-28 May at the RAI. This year’s Trade Show will be the largest ever, with more than 3,200 stands and 1,700 exhibitors. For more information about attending “World of Private Label” International Trade Show, email info@plma.nl or telephone (31) 20 5753032.

EVENTS

25-26 May	Conference on Emerging Markets Amsterdam

27-28 May	“World of Private Label” Trade Show Amsterdam

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