PLMA E-Scanner – March 2021

March, 2021
PLMA’s “World of Private Label” to take place on 14-15 December in Amsterdam

PLMA has announced that the 2021 “World of Private Label” international trade show, which was originally scheduled for May this year, will now take place on 14-15 December at the RAI Exhibition Centre in Amsterdam.

“We are very excited to return to holding an in-person trade show in 2021, even if it is later than originally planned”, said Peggy Davies, president of PLMA. “The PLMA team and its partners are fully motivated and eager to welcome the trade back to business in Amsterdam.”

The show’s physical configuration and safety policies are being organised as consistent with all COVID-19 government regulations and protocols: Extra-wide aisles, hygiene toolkits on stands, safe catering and stand design setups, are some of the measures to be expected.

“The show floor will be adapted to the new social distancing rules whilst maximising all available space to provide the best possible in-person experience”, explained Peggy Davies.

Strong growth for Ahold Delhaize and Carrefour

Two of Europe’s largest retailers closed 2020 with strong sales growth. Ahold Delhaize ended the year with sales of 74.7 billion euros, a growth of 14.2%. E-commerce sales increased and more than anticipated, to 7.6 billion euros, or 67.4% in 2020. The retailer performed better than expected in all of the eleven countries in which it operates.

Carrefour achieved its best performance in two decades with an LFL turnover growth of 7.8% to 70.7 billion euros. Best performing markets were Belgium (+8.3%), Spain (+7.1%) and Latin America (+23%). Online sales rose by more than 70% to 2.3 billion euros. Private label sales increased to 29% share of overall sales.

The retailers’ sales growth can, of course, be attributed to the Covid crisis, which caused a shift in consumption from out of home to in-home. On the other hand, the crisis also forced both companies to incur higher costs and make investments, which has put pressure on net profits. Profit for Ahold Delhaize fell from 1.8 to 1.4 billion euros. Carrefour’s net profit fell 43% to 641 million euros.

Dagrofa introduces new date labels

Dagrofa, one of Denmark’s leading food retailers, has introduced new date labels on more than 900 own brand food products. According to the company, many consumers are confused with the “best before” date label on the packaging and, consequently, good food often ends up in the bin.

The packaging of the company’s own brands OMHU, Gestus, Grøn Balance and First Price will now have an additional “often good after” label. Dagrofa aims to encourage consumers to review, smell and taste the product that has reached the best before date, and let their senses judge whether it can still be eaten.

The move is part of the retailer’s strategy to help reduce food waste in consumers’ households. A study by the Danish Environmental Protection Agency has estimated that private households account for 36% of the total Danish food waste. In addition, Dagrofa has started a number of initiatives to reduce its own food waste by 50% by 2030.

Pressure on retailers in Poland

The Polish competition authority (UOKiK) has announced additional measures to ban unfair trading practises in the food supply chain. While the EU wide Directive on UTPs is yet to be implemented, Poland already has its national provisions in place. It now plans to significantly expand the list of unfair business practises from four to 17 points. Amongst others, discounts, listing fees and advertising subsidies should also be classified as unlawful. The change in law, which is to be passed in May, is expected to have a negative influence on the profitability of retail.

In addition, large retailers in the country are under pressure because of the many taxes that are imposed on the sector. Also, since the beginning of this year, retailers have had to pay a staggered income tax, and the top 15 food retailers would have to pay the maximum amount. A study by the Warsaw School of Economics estimates that half of the large retailers could be loss-making this year. The legality of the tax is being reviewed by the European Court of Justice.

Rewe second biggest retailer in Europe?

Rewe CEO Lionel Souque expects the company to become the second largest grocery retailer in Europe, overtaking Carrefour and Aldi. In the past financial year, it cracked the sales mark of 75 billion euro for the first time. This leaves the company at quite a distance from the number one in Europe, Lidl owner Schwarz group, which achieved sales of over 110 billion euros.

Rewe’s considerable sales growth last year is partly due to the takeover of wholesaler Lekkerland that accounted for 12 billion euros of the growth. Lekkerland is specialised in the convenience sector and operates in five European countries.

Brand manufacturers attack retail alliances again

Under the umbrella of the European brand association AIM, brand manufacturers have appealed to the EU to investigate the possible abuse of power of international buying group Agecore. According to the association, the business model of international retail alliances has an anti-competitive effect on the market, which is to the detriment of the supply chain and eventually the consumer.

Christian Verschueren, Director of European retail organisation Eurocommerce, reacted to the appeal with concern. He states that Europe’s retailers and wholesalers operate in a limited number of countries, and in a highly competitive market, with high fixed costs and low margins of 1-3%. Powerful multinational brand suppliers often operate across the globe and enjoy margins some ten times higher than those of retailers. Retail alliances help create efficiencies and synergies in sourcing in the single market.

It is not the first time that alliances are under fire. In the past, brand manufacturers have regularly put pressure on EU authorities to stop the operation of buying centres. However, after one investigation in 2019, the Commission’s Joint Research Centre produced a report with very clear findings: retail alliances are not a source of unfair competition. They can help competition by generating efficiencies and providing a countervailing force against large brand manufacturers, and thus lead to lower consumer prices. Competition Commissioner Margrethe Vestager concluded that “Buying alliances between retailers have become a key component of grocery supply chains. They can bring lower prices to consumers for food and personal care brands that they purchase daily.”

Four thousand supermarket stores in Belgium

Belgium has one of the highest numbers of supermarkets in the world in relation to the number of inhabitants. It will have 4000 supermarket stores this year, according to data collected by trade magazine Gondola. As a comparison, neighbour The Netherlands has about the same number of stores with one and a half times the population (17.2 million).

It is an important figure in that it gives an indication how fierce the competition in Belgium is today. Market leader Colruyt has a 30.3% share of the market, followed by Ahold Delhaize (24.9%), Carrefour (18.4%) and Aldi (11.5%). All retailers have announced expansion plans in the country: Colruyt will open a dozen stores, Lidl will open 23 stores, Aldi plans for 30 new stores and Delhaize announced that it will continue to expand. Also, Albert Heijn wants to enlarge its presence, in addition to adding regular stores, it will also bring its unmanned office format “AH to go” to Belgium. In the coming year it will open at least 25 office locations. To support the growth of the chain in Belgium, it is looking for 500 new employees.

French retailers support dairy sector

Centrale Envergure, which negotiates on behalf of the Carrefour and Système U groups, has announced a deal with all large dairy producers in France, including Sodiaal, Yoplait, Lactalis, Savencia, and Eurial, to raise the price of milk.

The agreement marks the third consecutive year when the supermarket chains have agreed to provide better remuneration for dairy farmers in France. It sees Carrefour and Système U work with more than 30,000 producers of cow and goat milk through private or cooperative processors, producing more than 800 million dairy products manufactured in France and sold in the retailers' stores.

Since the implementation of the Egalim law, which ensures payment of fairer prices to farmers for their products, Carrefour and Système U have been fully committed to supporting the dairy sector.

Aldi Nord and Süd cooperate in e-commerce

Aldi has followed developments in e-commerce closely for more than ten years, but it refrained from seriously entering the online food business for fear of affecting the brick & mortar stores. Now, there are signs that it is finally preparing for entry into e-food in Germany. Aldi Nord and Süd have founded a joint e-commerce operating company to bring together their previously divided online service “Aldi liefert” under one roof.

The new headquarters are located in Düsseldorf and are actively on the look for personnel. The purpose of the newly founded joint venture is online trading, “especially with groceries and everyday items.” Some of Aldi’s subsidiaries abroad have already taken steps towards online. In Ireland and the UK, Aldi launched a click-and-collect trial in several stores. The service was hugely popular, and the retailer has extended the click-and-collect service to several hundreds of new stores.

In the Stores 

Despar Italia has launched a new line of private label frozen pizzas featuring eight different toppings, using selected PDO and PGI ingredients sourced from across Italy.

Ahold Delhaize is acquiring 39 stores from the Deen chain in the Netherlands and converting them to the Albert Heijn banner. The remainder of the 80 Deen stores will be owned by regional chains Vomar and Dekamarkt.

SPAR is rolling out its 15 SKU range of products under the Natural brand across selected stores in the UK.

The Dutch retailer Plus is introducing a range of premium, seasonal fruit and vegetables under the Smaakselectie (Taste Selection) brand.

Lidl Belgium has added 11 meat substitute SKUs and several sandwich spreads to its vegetarian and vegan range.

Online grocer Picnic is due to launch in France this year in the region around Lille.

All products of drugstore chain Rossmann's own brand Alterra have been climate-neutral since January 2021 - that's around 260 items.

Waitrose is to almost halve the amount of single-use plastic on all its own brand Easter eggs and confectionery this year as it works towards its goal of eliminating the use of unnecessary packaging.

German discounter Aldi has been named the UK's top in-store supermarket, beating stiff competition from the big four grocers and rival chain Lidl.

SPAR Austria is promoting domestic agriculture with a new own brand line showcasing local producers on the packaging.

Vollmart - a new chain of hard food discount stores will open stores in Poland.

Russian supermarket chain Svetofor opened its first store in Serbia.

Delhaize has launched a line of fresh soups made from surplus vegetables under the name ‘From waste to taste’.

Swiss retail group Migros is expanding its range of organic food to include products with the Demeter label, produced especially for Migros.

Continente launched a new own brand of ecological products in the home cleaning, clothing and paper ranges called Continente ECO. In addition, the company has added healthy snacks in different flavours to its Continente Equilíbrio range.

Coop Switzerland offers fruits and vegetables that fall outside the norm under the Ünique own brand.

Sainsbury's has unveiled a new brand tagline – “Helping everyone eat better” – to reflect its focus on becoming more environmentally conscious and giving customers value for money.

Jumbo is opening 10 new hubs in the Netherlands this year due to growing online demand. The retailer is also investigating the possibilities for opening a new e-fulfillment center.

Magnit PJSC, one of Russia’s leading retailers, has opened two pilot warehouse stores in Moscow that only serve online orders. They are so called “dark stores”.

Albert Heijn will change the fresh routing in all stores and launch a new and renewed range of fresh convenience products.

Intermarché and Netto will introduce a more ecological packaging for meat under the own brands Jean Rozé and Netto.

Lidl is promoting its meat offerings from regional sources with a new seal with the words "Strong partners - Lidl and German agriculture”.

Aldi Süd is expanding its influencer marketing and starting a cooperation with vegan influencer Philipp Steuer under the motto "Einfach.Lecker.Vegan".

Lidl will be sharing its entire private label product catalog with rating application Yuka in France.

Aldi UK is launching a “geometric Easter egg” as part of a drive to cut down on plastic packaging. The eggs have a flat bottom, doing away with the need for a concave plastic insert to support them.

Spanish supermarket group Mercadona has shared €409 million of its 2020 profits with its entire workforce of 90,000 employees.

Jumbo opened the most sustainably designed supermarket building in the Benelux in the Dutch city of Goor.

Consum expands its online store and has incorporated online shopping and a QR code reader in its mobile application ‘Mundo Consum’.

Czech-Republic-based online supermarket Rohlik Group has raised €190 million from investors to launch in Germany and other European markets.

E.Leclerc launches baskets of balanced products for 21 euros for 21 meals.

In Italy, Consilia’s private label products grew by 25.3% in 2020.

Lidl France launches the first eco-designed private label milk carton made of plastic of plant origin.

Market Research 
Grocery market continues growth

According to global insight provider IGD, the global grocery market is to generate an additional $440 bn in sales by 2022. This follows accelerated growth for grocery in most of the global retail market in 2020, driven by a shift in consumer spend due to the pandemic restrictions.

For Western Europe, IGD expects economic challenges to cause a renewed focus from retailers on price to remain competitive. In the medium term, Central and Eastern Europe is expected to grow faster than Western Europe.

Larger assortments in Spain

IRI reports that retail chains in Spain are increasing their assortment of grocery, drugstore and cleaning products. In response to the numerous changes in consumers’ lifestyle, the demand for these products has risen sharply. Best performing products in January were parapharmacy products, with an increase in value of 78%. In the spirits department, the premium segments win over the standard lines, reflecting the indulgence of consumers.

Events 
14-16 November 2021

PLMA’s U.S. Private Label Trade Show
Chicago

14-15 December 2021

"World of Private Label" International Trade Show
Amsterdam