PLMA E-Scanner – October 2017

October, 2017
Private label grows in UK

Nielsen reports that consumer spending on retailer brands in the UK is growing at close to five times the rate of spending on A-brands. In a recent three-month period, consumer spending on private label products rose 5.5%, compared to only 1.2% for manufacturer brands.

The average sales increase across all grocery products was 3.5%. “The return of inflation means shoppers are increasingly turning to supermarkets’ own-label products to help manage their weekly grocery spend,” said Nielsen. “Own-brand sales are growing across all major food retailers but fastest at the discounters, Aldi and Lidl, and at the Co-operative, Iceland, M&S and Tesco.”

Shoppers are spending again

Consumers across Europe are spending again. Nielsen reports that European consumers spent 3.7 % more on grocery shopping in the second quarter than in the first, the largest increase in three years’ time. The growth is a combination of a 2 % price increase and a 1.7 % volume increase, according to Nielsen data on food retailers from 21 European countries.

Looking at the major European markets, Italy ranked first (+ 4 %), followed by France (+ 3.2 %), while Germany posted 2.3 % growth.  Turkey experienced the largest increase in cash register income, (+ 14%), while in the EU Slovakia climbed 9 % and Austria was up nearly 7%. In Belgium, growth reached 2.8 %, its highest numbers in several years.  Dutch growth was 2.9 %, thanks to a 0.2 % volume growth and a 2.7 % price increase.

Carrefour makes headlines

Carrefour is much in the news these days. First, new chairman and CEO Alexandre Bompard announced the appointment of a new group executive committee. It is comprised of existing managers from the group as well as outsiders. Carrefour describes the creation of the group as ‘an important milestone’, which will define and implement a corporate transformation plan.  

Soon after, one business publication reported that Amazon may be making a bid to acquire Carrefour in an attempt to increase its foothold in Europe. The Paris stock market reacted positively to the speculation as Carrefour’s share price climbed sharply.

The publication, Valeurs Actuells, stated that the acquisition would make sense in light of the online retailer’s takeover of Whole Foods in the U.S. Some retail analysts suggested that despite the speculation, they believed a collaboration with Google was more likely than an acquisition by Amazon.

EU issues guidelines

The European Union has issued guidelines to help national authorities determine whether a company is breaking laws by selling food or drink products of dual quality in different countries. The new guidance says there could be a breach of EU consumer laws if consumers are not informed about the difference in a product between two countries and if the difference affects their buying behaviour. The European Commission said that the key question for consumers is: ‘Would I still have purchased this product if I knew that there was a significant difference compared to this product I had tasted in another member state?’

The issue of dual quality has been prevalent in Central and Eastern Europe with a recent study from the Czech Agriculture Ministry revealing that foods sold with the same packaging and under the same brand vary from one state to another.

Online leads to consolidation

The growth of online shopping may be leading some retailers to consolidate their brands. Auchan CEO Wilhelm Hubner said, “at the moment in which digital is leading the development of trade, it is important to have a single brand to be simpler for the customer to recognise, not five brands that will naturally create confusion”.

Auchan is merging all its 29 private label brands in Russia to the Auchan brand over a two-year period. The retailer also may discontinue its Jumbo hypermarket brand in Portugal by the end of 2018. In Italy, the retailer’s Simply brand was not well-known so all the group’s stores in the country will be renamed Auchan.

Aldi has success with premium

Aldi UK is finding success with its new premium ranges. The discounter reports that its best-performing categories were its Specially Selected range of premium products, alongside fresh fruit and vegetables, fish and meat. So far this year sales of Specially Selected are up 40%.  

Aldi is launching a new range of ready meals under its Specially Selected brand. All products contain 100% British meat and cost around 7.50 pounds. The retail is also expanding its Specially Selected Farmhouse premium yoghurt range, adding four flavours: blood orange and cranberry, beetroot and apple, raspberry, and lemon curd.  The products are made with 100% British milk.

Food-to-go grows in UK

The UK’s food-to-go sector is set to grow by more than a third in the next five years to be worth 23.5bn pounds, forecasts IGD. Coffee shops and specialists are set to make the highest gains as the 17.4bn category experiences a surge in popularity.  Convenience retailers and supermarkets will also enjoy healthy rates of growth of around 6%.  

“What we’re seeing is a growing number of retailers, specialists and suppliers looking at how they can take advantage of that food-to-go opportunity,” said IGD. “We know that shoppers are shopping more frequently, their basket sizes are smaller and more food to go is a very natural part within that, so that’s becoming more important as a source of shopper missions as a whole.”

New ‘on the go’ range

Delhaize in Belgium has launched a range of ‘on the go’ breakfast products under the Fast Break name. The range features six 100% natural breakfast products, including yoghurt, granola, oatmeal, fresh fruit, and chia seed pudding. These are packaged in a plastic take away cup, which also includes a spoon. The products are free from additives and high in fibre as well as vitamins and antioxidants. The full range includes granola with yoghurt and strawberry; granola with yoghurt, apples and grapes; granola with yoghurt, mango and pineapple; apple oatmeal, raisins and cinnamon flakes; breakfast smoothie with blueberries and strawberries; and coconut chia seed pudding with mango and pineapple.

Albert Heijn gets personal

Albert Heijn in the Netherlands has introduced a personalised grocery list programme on its online shopping portal, ah.nl, to make the service quicker and more convenient for customers. The ‘intelligent list’ compiles suggestions and predictions based on what customers purchase and how often they select certain products. When making an order, customers check the personalised list and add or remove products that they need on that occasion.

Albert Heijn has tested the updated service with over 2,000 customers so far, and is now inviting its 65,000 registered customers who regularly make online grocery purchases to use the new feature. The retailer’s online shopping service allows customers to make orders in-store, in the app, or on the website.

Colruyt offers product finder

Colruyt in Belgium is launching a “Product Finder” website, offering in-depth information about its private label products. On the digital platform, shoppers can easily find the products that match their eating habits or diet. In addition, it allows to search information on ingredients, nutritional values or the lifespan of the products. The retailer said it chooses to provide only information about its own brands because then it is certain that all information is correct. Consumers can also sign up to participate in comparative taste tests. This allows them to provide feedback on the composition of new or adjusted products.

In the Stores 

Ahold Delhaize will be selling private label health and beauty products from its Etos drugstore group at its grocery stores in Belgium, Romania, the Czech Republic and Greece.

Carrefour plans to roll-out a minimarket format under the BonApp banner in France. The stores will carry about 800 SKUs, including the BonApp private label brand, which will account for about one quarter of the products offered.

Aldi announced that sales in the UK and Ireland were up by 13% to 8.7 bn pounds in its 2016 financial year.

In Poland, Aldi is planning to increase the number of products carried in its remodeled stores.  The number of SKUs will be expanded to 1,700 items.  

Intermarché in France has begun offering private label products from Conad, the Italian retailer.

Lidl has removed all products containing microbeads from its UK stores.

In Switzerland, Lidl has launched an online meal box service.

Spanish retailer Mercadona is preparing for its entry into the Portuguese market with the opening of an innovation center near Porto.

SuperValu remains the largest grocery retailer in Ireland, with a 22.1% market share, according to Kantar Worldpanel.

Penny Market has relaunched its Valbonta brand line of dairy products, made with 100% Italian milk.

Tesco is adding sparkling wines to its Finest collection.

Asda is launching a cosmetics range under the George brand, featuring over 150 make-up products with prices ranging from 2 to 6 pounds.

Coop Switzerland has introduced a range of toiletry products designed for children, under its Naturaline brand.

Edeka has the highest level of customer satisfaction among supermarket and hypermarket shoppers in Germany, according to poll by Kundenmonitor Deutschland.

Morrisons in the UK aims to double the size of its The Best premium range by the end of the year.

Ocado, the UK online grocery retailer, posted a 13% increase in sales in the third quarter.

Carrefour Belgium is introducing a line of free-range chickens that have been reared without antibiotics under the Carrefour Quality brand.

Netto Marken-Discount in Germany has introduced a fruit and vegetable range under the Markttag brand, which combines items from its Erntefrisch and Premium N ranges

Migros has started to sell products under the Orange Garten brand through Chinese online platform NetEase Kaola. The Orange Garten brand is now used to market Migros products abroad.

Marks & Spencer is testing an online grocery service in one store that will enable shoppers to have their dinner delivered to their front door within an hour.

Sainsbury’s is testing a checkout-less system at one store.  It allows customers to pay for groceries using their mobile phone.

Sainsbury’s is expanding its range of Gary vegan cheeses.

Spar UK is introducing a range of premium evening meals.

Eroski is extending its online order pick-up service up to 49 locations in Spain.

Lidl has launched an online shop for the Czech Republic, following the opening of other e-shops in Belgium, the Netherlands and Germany.

Albert Heijn is launching a range of fresh soup pots, containing ready-cut fresh vegetables.

Coop Sweden has launched a range of 18 ready-made, peeled and chopped fresh vegetables under its Hackat och Klart (chopped and clear) brand.

Carrefour has completed the rebranding of the former Billa stores in Romania.

Private label sales in Brazil grew by 16% in 2016, according to Nielsen. Last year, 58 new private label brands and 2,190 new products were launched.

Market Research 
Dutch shop in fewer stores

The percentage of customers in the Netherlands shopping at more than two supermarkets has decreased sharply, according to research from Deloitte. A growing group of consumers only visits one banner. In 2015, 66% of Dutch consumers did grocery shopping at three supermarkets or more, but that percentage dropped to 58% in 2017. Almost 11% of customers only use one format, while only around 6% did so two years ago.

Deloitte says the end of the economic crisis is an important explanation for this development. “An increasing number of consumers have increased financially and feel less tempted to go bargain hunting at several supermarkets. They choose the convenience of buying all the groceries at one store.”

Italians going gluten-free

Sales of gluten-free bakery products in Italy have seen a 20% growth in the last year, reaching 56m euros, driven by snacks, crackers and biscuits, according to Nielsen. Overall, the wellness segment, which includes general health, organic and gluten-free products, has seen 2% growth during the last two years. Snacks are also gaining, with sales growing by 37% in value and 45% in volume.

PLMA News 
PLMA’s US trade show, 12-14 November

This year’s PLMA’s Chicago trade show, to be held 12-14 November, will be more international than ever. There will be more than 400 international exhibitors in nearly 600 booth spaces, coming from nearly 50 countries.  The exhibitors include pavilions from Italy, France, Spain, Mexico, Canada, Peru, Ecuador, China, Turkey, Greece, Czech Republic, Vietnam and South Africa.

Overall, more than 1,400 companies will be exhibiting their products. The trade show features PLMA’s Idea Supermarket, which displays products from around the world. There also will be a special display of PLMA’s Salute to Excellence Award winning products introduced by retailers across the U.S. New Product Expo features products new to private label that are being displayed by exhibitors. A number of seminars and workshops are also offered to attendees.

Events 
24-26 October

PLMA’s Executive Education Programme
Amsterdam, The Netherlands

12-14 November

US Private Label Trade Show
Chicago, USA

28-30 November

Shanghai Private Label Fair
Shanghai, China