	Summer 2010

	IN THE STORES Waitrose in the UK will launch an upmarket ‘Heston from Waitrose’ range based on recipes from Heston Blumenthal, a celebrity chef
	MARKET RESEARCH Planet Retail predicts “super premium” gains
	PLMA NEWS Executive Education Programme to be held 26-28 October
	EVENTS

EU issues positive report on private label

A new EU report on retail trade practices takes a more positive attitude of private label than expected. The report says, “Private labels have increasingly become both vehicles for product innovation and also as a means for retailers to directly control the quality level of products and consequently its product liability obligations, which underscores the strength of their respective brands.”

The EU commission says it plans to follow up on the study this fall by recommending specific measures to create “a more efficient and fairer market.” According to Lebensmittel Zeitung, the new report shows a shift in attitude toward retailers and their brands. “At the end of 2009, retailers were still seen as a main culprit for problems in the food chain,” the publication reported.
Another EU study examines the role of private label in the agriculture food chain. Results of that study are expected to be published later this year.

Shopper data shows retailer brand growth

   While sales data is documenting the recent gains by private label, shoppers are beginning to speak for themselves. In Germany, a consumer poll released by Lebensmittel Zeitung shows that nearly one of every three shoppers (31%) say they bought more private label products during the prior six months. By contrast, only 2% of shoppers had purchased more manufacturer brand products. Almost half (45%) of the respondents believe that the economic situation had no impact on their shopping behaviour.
   In the UK, a survey of shoppers shows that middle-income earners are now more likely to buy private label products than low-income earners. The survey found that nearly 50% of consumers who earned between £25,000 and £50,000 would always buy a retailer’s brand product when possible, compared to just 25% of lower-income workers.
   Shoppers in Poland say they are buying more private label products because of their improved quality. A study by the PMR market research company shows that last year 41% of consumers bought private label brands more often than they did in the prior year. “As private label offerings expand and as their quality improves, demand for such items is set to grow further in Poland in the years ahead,” PMR says.

More regulation for UK retailers

UK grocery retailers can expect more regulatory oversight of the nation’s grocery sector. The government says it plans to cut regulation for small businesses and farmers, but increase regulatory oversight of the grocery sector and appoint an ombudsman to enforce the Groceries Supply Code of Practice. The Code was introduced in February, providing retailers with guidelines of how to deal with suppliers in an effort to ensure fairness.

Big retailers expanding in China,
PLMA sponsors Shanghai trade fair

   Three of the world’s largest retailers are stepping up their expansion in China. Wal-Mart is planning to add 10 million sq. ft. of retail space this year, Wal-Mart Asia CEO Scott Price told the local press. “This is a huge expansion of Wal-Mart in China.”
   Carrefour announced it has acquired 51% of Baolongcang, a hypermarket chain operating 11 stores southwest of Beijing. Overall, Carrefour plans to open 22 hypermarkets and 140 discount stores in China this year.
   Tesco plans to open 80 shopping centres by the end of this year, covering 40 million sq. ft. for its hypermarkets and other stores. Over the next five years, the retailer intends to invest 2 billion euros in building its stores there.
   Reflecting this growth, PLMA is cosponsoring a special trade exhibition to help members to make contacts and build business in China. PLMA, in conjunction with the Shanghai International Sourcing Promotion Centre, is holding the 2010 Shanghai Private Label Fair on 8-10 December. The show provides an opportunity for companies meet buyers from China’s leading retailers and wholesalers as well as trading companies and manufacturers in China who are looking to partner with western suppliers. For more information, contact PLMA International Council. Telephone (31) 205753032 or email shanghai@plma.nl.

Aldi to leave Greece

Aldi has announced its plans to leave the Greece market and this may open the door for Delhaize to increase its presence in the country. Aldi says it will sell or close all its 38 stores in the country by the end of this year. It is the first time the retailer has withdrawn from a national market.
Delhaize also operates about 220 stores in Greece. Discussing trade speculation about acquiring the Aldi stores, a spokesperson said, “We stay always open to interesting fill-in acquisitions in markets where we are already active,” adding that retailer is focused on growth in the Balkan region.

Eroski brands climb to 33% share

Private label is making big gains at Eroski, the Spanish retailer. Gotzon Elizburu, Director of Purchasing, said, “Our brand has experienced strong growth, supported by its proven quality and competitive price, climbing three points in the year 2009 to reach 33% of the total sales of the group.” In line with this strategy, the retailer has launched a cosmetics brand, called Belle, offering 71 products in categories such as hair care, skincare for men and women, and accessories for cosmetics.
To facilitate such growth Eroski is introducing a software programme called Trace One. It aims to expedite the launch of new products as a result of more effective collaboration with suppliers and a reduction of management costs. The system features an information system which allows full traceability of all ingredients in less than 24 hours.

Asda to revamp its brand programme

Asda in the UK plans to redesign its private label programme. The goal is to improve the shopper’s perception of product quality, according to the retailer. The first change will be beer, spirits, beverages, cereals, snacks and biscuits. They will be followed by confectionery, canned food, soft drinks, deserts, baking products, vegetables, meat and frozen food in November. The retailer also is expanding its ‘free-from’ offering with 78 new ambient private label and branded SKUs.

Edeka expands discount stores

Germany’s largest supermarket retailer is rapidly expanding its discounter stores. Edeka announced plans to open 300 Netto Marken Discount stores in Germany this year and another 300 next year. Edeka has finished switching the 2,300 Plus discount stores it acquired from Tengelmann to the Netto banner. The Plus banner has now disappeared in Germany Edeka, which operates 12,000 supermarkets, has about 4,000 Netto stores in Germany.

Czech retailers add bio products

Sales of private label bio food products in the Czech Republic increased by 60% last year, reports the PMR consulting and research company. The number of products available rose during the period in question from 331 to 528. The highest growth was recorded by Billa. However Tesco reduced the size of its Tesco Organic product range by 5%. Interspar had the highest number of retailer brand bio food goods, nearly 100, climbing over 50% from the prior year.

Migros leads brand survey in Switzerland

Migros is now the strongest brand in Switzerland, according to a new study. Brand Asset Valuator 2010, reported that for the first time, Migros is the leader of the top 20 strongest brands in Switzerland. The Migros brand ranked third in last year’s survey. The research also showed an upsurge in consumer preferences for “local” and “traditional values”.

Albert Heijn introduces Cooking for 1

Albert Heijn has introduced Cooking for 1, a programme that offers the fresh ingredients needed to prepare a meal for a single person. The meal components (meat / fish / meat substitutes, vegetables, pasta / rice / potatoes / wrap) are packaged in individual compartments with a little bag of sauce.
The Dutch retailer also plans to add more than 100 products to its puur & eerlijk ethical range this year. With the new items the range, which was introduced last year, would grow to about 450 SKUs. The retailer also may add another 50 products by the end of 2011.

IN THE STORES

Waitrose in the UK will launch an upmarket ‘Heston from Waitrose’ range based on recipes from Heston Blumenthal, a celebrity chef. The initial products will be introduced in October.

Casino has introduced a range of gluten free products in partnership with the French Association for individuals intolerant to gluten (AFDIAG).

Douglas, the health and beauty retailer, is giving a high priority to expansion in Italy and Poland.

Carrefour has launched its economy range, Carrefour Discount, in Spain. The range covers over 300 food and nonfood SKUs, including ambient, fresh produce, beauty and personal care products and household goods.

Boots, UK health and beauty retailer, reports that sales of its No7 range have been especially strong.

Auchan is expanding its organic food range, launching more products under its Mieux Vivre Bio brand.

Metro is testing a small cash & carry format in Central and Eastern Europe.

Leader Price in France is introducing 80 products to its Fine Ligne range. The brand range focuses on a balanced diet but with gourmet recipes. The range includes several breakfast items (jams, cereals), ready meals and biscuits with reduced salt, sugar and saturated fats.

Leclerc plans to expand its offering in the nonfood formats, which already account for 40% of sales.

Sainsbury's has launched a new range called House; a collection of 24 wines priced at £5 and under.

Zabka, the convenience store retailer in Poland, has introduced 70 products under its brand names. By the end of this year, the retailer plans to sell up to 200 SKUs, including dairy products, cold meats, snacks, beer and non-alcoholic beverages, tinned food and sweets.

Aldi Süd in Australia has reformulated its private label range to exclude artificial food colours. The retailer also has joined the Carbon Reduction Label programme run by Planet Ark. By the end of this year, Aldi’s everyday olive oil range will feature the Carbon Reduction Label.

Spar in the UK announced plans to increase marketing activity for its private label, as well as digital and in-store campaigns next year.

Coop Schweiz has acquired The Body Shop Switzerland SA and concluded a master franchise agreement, with The Body Shop International plc, for Switzerland and Liechtenstein.

Tesco is testing its first Extra hypermarket in Hungary. The store is in Budapest.

MARKET RESEARCH

Planet Retail predicts “super premium” gains

   Despite the success of value ranges during the global economic slump, a leading retail consultant foresees a greater move towards a new “super premium” in the near future. Unlike traditional premium lines, these new ranges will trade for very high price points, enabling retailers to regain some margin lost as a result of price investments in other areas of the store, says Planet Retail, based in the UK.
   Its study, “Private Label: The Brands of the Future,” also finds that the global economic slump has accelerated the long-term growth of private label. “The general trend to discounting, focus on margins and cost control has prompted retailers to rationalise their ranges, freeing up room for private label to underpin their price aggressiveness,” the consulting firm says.
   It adds that “multinational retailers such as Wal-Mart, Carrefour and Tesco are driving private label growth in emerging markets, especially in Latin America and Asia.

French see big changes in retailing

Nearly one of every three French consumers (31%) identify retailing as one of the business sectors that has changed the most during the past 20 years, according to a poll conducted by GfK. Ikea and Auchan were the only two banners are mentioned spontaneously when respondents were asked what has changed most in the last 20 years in retailing. The research shows consumers primarily favour innovations that increase their purchasing power and protect the environment.

PLMA NEWS

Executive Education Programme to be held 26-28 October

Registration is now open for PLMA’s 2010 Executive Education Programme, to be held 26-28 October in Nyenrode Business Universiteit, near Amsterdam. Developed in conjunction with Nyenrode, the program is devoted exclusively to private label.
The faculty is drawn from the university as well as industry. Classes are concentrated into a three day schedule of instruction that includes workshops and case studies. The curriculum emphasises basic knowledge from private label history to fundamentals of packaging and promotion. Enrollment in PLMA’s Executive Education Programme is open to members and their guests. For more information, click here.

EVENTS

26-28 October	Executive Education Programme Amsterdam

14-16 November	US Private Label Trade Show Chicago

8-10 December	Shanghai Private Label Fair Shanghai

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