PLMA E-Scanner – March 2020

March, 2020
Will the two Aldis merge?

Speculation is rising that Aldi Nord and Aldi Süd are actively pursuing a plan to merge by 2022. German website Manager Magazin claims both discounters decided on the merger two years ago in an internal document that details how both branches will strive to form an association, raising efficiency and cutting staff costs.

Aldi Süd says that the two organisations are working closer together than ever, but denies that a formal merger is planned.
The website attributes the planned merger to the increased competition both Aldis met in the last few years from supermarkets in Germany as well from the discounter Lidl and the online retailer Amazon.

The first steps that enable a merger have already been taken.  Both companies have coordinated their technology infrastructure and made an agreement with a mutual credit card service provider and with a marketing agency. Last year, both branches also announced they would join forces on their private label range.

North and South split in 1961, due to a difference in opinion between the founding brothers Theo and Karl Albrecht on the sale of cigarettes. All family members who were involved in the split have passed away, making a merger possible. Together the discounters have 11,000 stores on four continents.

Carrefour builds its brands

Carrefour is restructuring its private label assortment as it looks to increase sales. LSA reports the retailer is streamlining the purchasing process and aims to achieve 33% market share for its private label products in France by 2022.

Martine Loyer, director of food brands for the Carrefour group, says: “It was urgent to think ‘customers’ and to focus on the needs of consumers. To no longer organise our brands according to departments or manufacturers. This project was carried out at full speed, in only eighteen months, which is extremely fast. But the goal is that a customer who enters Carrefour immediately understands the banner’s renewal.”

Alexandre Bompard, the president of Carrefour, is calling for a 15% reduction in the overall assortment before the end of 2020. On the private label side, Martine Loyer was hired from General Mills in 2018, and the private label team has been expanded from 80 to 120 people. More than 2,500 consumers took part in the development of the new core range structure “We are now tackling the bulk of the business. That is to say at the heart of the market,” says Loyer.

This project does not affect the entry price range. “Our white products, some 500 references, represent 5% of our brands’ turnover,” says Loyer. The premium brands will be strengthened.

Walmart may reduce Asda ownership

Walmart is still looking for a way to reduce its ownership of Asda in the UK.  The retailer said it might sell a majority stake in Asda after some parties showed interest in possible investment. The news come after UK regulators blocked Walmart’s plan to merge Asda with Sainsbury’s last year.

Walmart said it would be likely to retain a stake in Asda if the plan moved forward. “No decisions have been made and we will not be commenting further on these discussions”, the retailer said. Walmart bought Asda in 1999. The company is among the top three supermarkets in the UK, with an estimated 15% of the market.

Private label grows in Poland

Sales of private label are climbing in Poland. Nielsen reports that the value of private label sales in Poland in 2019 was PLN 32.1bn, up 4.7% from a year earlier.

Currently, own brands account for 19.8% of fast-moving consumer goods sales in Poland. The most frequently purchased products are the dairy own brands of the two largest retailers, Mleczna Dolina (Biedronka) and Pilos (Lidl).

Nielsen says that Polish consumers have started to appreciate the quality of own brands.  More than four of ten (44%) of them say they are buying more private label products. Seven years ago, only a third said so. The growth is due to the trend of premiumisation of private label products, with higher quality and more unique items.

Biedronka looks to enter Romania

Biedronka, Poland’s largest grocery retailer, is preparing to expand to other countries and is especially interested in Romania. Pedro Soares dos Santos, CEO of Jéronimo Martins, the Portugese parent of Biedronka, said “the moment is coming to go beyond Polish borders. The country we’d like to go to is Romania, whether it will be this year or next, I don’t know”.

Boosted by the Polish business, Jéronimo Martins reported a 7.9% rise in net profit for 2019.
Sales at Biedronka jumped 8.8% in 2019 on a local currency basis, despite new regulation that prohibits supermarkets in Poland from opening on some Sundays.

Biedronka isn’t the only retailer looking to expand in Romania. Schwarz Group-owned Kaufland and Lidl are likely to spend a combined amount of over half a billion euros this year in expanding business in the country, according to published reports.

Ahold sells more healthy foods

Ahold Delhaize aims to increase the sales of its healthy private label foods, looking for them to account for 51% of sales by 2022. To achieve this, the retailer will continue to reformulate products by reducing sugar, salt and fats. Ahold will also make it easier for customers to meet their own, personal health needs by providing science-based nutritional navigation systems for customers, such as Nutri-Score and Guiding Stars, in stores and online.

The retailer also is providing more information about where private label products are sourced, which production methods are used and under which conditions they are produced. Building on the company’s nearly 100% visibility and sustainability in its own brand seafood supply chains.

In addition, Ahold is working towards zero plastic waste from its own brand range by 2025, through packaging reduction and moving to fully recyclable, reusable, or compostable plastics. Around 25% of own brand plastic packaging will be from recycled materials by 2025.

Tesco tests a cashless store

Tesco opened a cashless store in central London, with shoppers paying at self-service tills using a range of electronic payment methods, including debit cards, credit cards and Apple Pay on their phones. They cannot use cash.

It is Tesco’s first mainstream store to go cashless after it opened one at its Welwyn Garden City headquarters campus in 2018. That store is mainly used by Tesco staff although the general public can also use it.

Other UK retailers are testing cashless programmes. Sainsbury’s, is trialling a till-free grocery store with shoppers using its SmartShop Scan, Pay & Go app. The shop still had a helpdesk for customers who wished to pay with cash or cards.

Marks & Spencer is extending checkout free smartphone shopping to 44 stores. Shoppers scan products as they go and then pay for items worth up to 30 pounds via their iPhone using Apple Pay or a saved card on their M&S.com account.

UK shoppers recommend Aldi

Aldi is the supermarket in the UK most recommended by its customers, according to a YouGov survey that calculated the percentage of customers who say that they would recommend a brand to a friend or colleague.

Aldi leads the rankings with 78% of its current customers endorsing the discount supermarket to people they know. Ocado takes second place with a recommend score of 74%, just ahead of Lidl with 73%.

Aldi offers cooking boxes

Aldi Süd is offering cooking boxes including ingredients and recipes to prepare a meal. Aldi packs vegetables, pasta, rice, sauces and spices as well as recipes in small boxes with a handle. It starts with the basic ingredients for tomato and pepper soup, lasagna and green Thai curry. Customers have to buy meat and cheese themselves. The boxes are available for 3.33 euros each.

Aldi has set up an own section on the website and the products in the brochure are provided with QR codes. In this way, customers can access the recipes in digital form and videos, which, in addition to the enclosed cards, show exactly how everything is to be prepared.

In the Stores 

Metro is selling its Real hypermarket and related activities to a business consortium for around 1bn euros.

Carrefour Italia plans to open more than 300 Express stores in the next three years.

Leclerc reports sales of its Marque repère brand increased by 3.1% last year.

Asda opening food-to-go concessions in conjunction with specialty retailer Greggs in select stores.

Sainsbury’s is testing a convenience store format featuring fresh food to go items.

Online grocery shopping in Sweden grew 22%, while overall grocery sales were up 3%.

Kesko has been prohibited from acquiring the Heinon Tukku foodservice wholesale company by a government regulator in Finland.

Spar increased its market share to 7.3% in Norway in 2019.

Esselunga in Italy reported sales of 8.14bn euros in its financial year 2019, up 2.9% year-on-year.

Albert Heijn in the Netherlands is offering fresh hot meals in a few stores. Customers can collect meals from a kitchen or consume them in the store.

Discounter Kaufland says that it will have eliminated all micro plastics across its cosmetics and personal care ranges by the end of 2021.

Rewe has completed the transition to sustainably sourced private-label orange juice.

Edeka is rolling out a range of vegan burger patties and mince offered in two varieties, deep-frozen and fresh.

Lidl Belgium has rolled out a digital customer loyalty card app that allows shoppers to receive their cash register tickets and additional benefits.

Market Research 
Aldi and Lidl keep growing in UK

Aldi and Lidl will keep gaining market share in the UK, according to a report from the GlobalData research firm. It predicts while the size of the UK food and grocery market is set to grow 15% to 174.5bn pounds by 2024, the four largest supermarket retailers are expected to lose out on a further 1.1% of the total market during this period.

It forecasts that while grocery sales through the big four retailers (Tesco, Sainsbury’s, Morrisons and Asda) will grow 12.6%, the discounters and online players will gain further share, growing 25% and 55% respectively over the period.

GlobalData said recent sales results shows that “UK shoppers still have an unsatisfied appetite for the proposition of the discounters; Lidl performed especially admirably, growing year-on-year sales 11% in December. While there is evidence of a slowdown in like-for-like sales growth at Aldi and Lidl, both retailers still have substantial expansion plans for the UK.”

Portuguese consumers go to several stores

Portuguese consumers like to shop around. A new Nielsen study finds that around two-thirds (64%) of households in Portugal prefer to shop from more than four different supermarkets.
The trend to shop in multiple supermarkets has been prevalent in the country since at least 2017, according to Nielsen’s Panorama of Portuguese Retail report. Last year, only 11% of Portuguese shoppers chose two stores to fill up their shopping trolleys, while the percentage of those preferring only one store banner was even lower.

Among those polled, only 22% of the respondents stated that they preferred a mix of three stores, while 35% opted for four and 29% said they would shop in five stores.

PLMA News 
PLMA’s 2020 “World of Private Label” moved to 2-3 December

PLMA has announced new dates for its 2020 “World of Private Label” International Trade Show. The event, which was originally scheduled for 26-27 May, has been rescheduled to 2-3 December at the RAI Exhibition Centre in Amsterdam. The change to later dates comes in light of government announcements prohibiting large events such as trade shows during the Coronavirus crisis. More information on the 2020 “World of Private Label” may be found here. For any further questions, please contact PLMA at info@plma.nl.

Events 
2-3 December
PLMA’s 2020 “World of Private Label”
Amsterdam