PLMA E-Scanner – January 2020

January, 2020
Ahold Delhaize wants unified pricing

One of Europe’s leading retail executives is calling on the A-brands to change their pricing policies.  Frans Muller, CEO of Ahold Delhaize, wants greater transparency and more unified pricing across Europe.

“Consumers should be aware that most branded products from large manufacturers are produced in only three factories,” Muller said in an interview with German Retail Blog. “So why do we have different prices in each of the 27 national markets? Why are we not seeing a faster trend towards European prices? After all, if we could simplify things, it would make our lives easier”.

Muller believes huge price differences for standard branded products undermine all the advantages of a single European market. They also make the supply chains unnecessarily complex. “This is not our fault as a retailer because we are more than open to more price transparency. It is also unfair that suppliers seem to be very happy when large discounters buy centrally, although they are much larger than us.”

Muller wants more efficiency in the supply chain and more price transparency for customers. “It is very difficult for them to understand why someone in France only has to cross one border to the south to find a can of soda that is 25 % cheaper. So please, let us have more price consistency and transparency in Europe”, he said.

Tesco reviews Asian stores

Tesco is deciding whether to remain in Asia, which could result in a sale of those Thai and Malaysian operations. The retailer said its review of these operations was just beginning. Tesco sells from nearly 2,000 stores in Thailand, many of them convenience stores, and 74 markets in Malaysia.

If Tesco does leave Thailand and Malaysia, its only overseas operations, apart from Ireland, will be its Central Europe division, consisting of stores in Hungary, Poland, Slovakia, and the Czech Republic. Since 2011, Tesco has exited the US, Turkey, Japan, South Korea, and China.

Carrefour tests new formats

Carrefour is testing new formats under the Carrefour Express banner.  In Warsaw, Carrefour has opened an automated Express 24/7 store, open 24 hours a day, seven days a week. In Brussels, a new Carrefour Express has a large dining area and features fresh and organic foods.

Carrefour is also trialing another format in Belgium called Carrefour City. The 200 sqm store offers a range of everyday products with an emphasis on private label. Meals like breakfast, salads, pizzas, sandwiches or soups can be either consumed on-the-go or in the Carrefour Café.

Netherlands backs Nutri-Score

The Netherlands is backing the Nutri-Score nutritional labelling system. While the government selected Nutri-Score as the country’s labelling scheme of choice, it noted that its nutritional calculations do not ‘always comply’ with Dutch dietary guidelines. The situation must improve before Dutch food producers can put it on their packaging. An international committee of scientists, with Dutch input, will work on aligning standards. This effort should be completed by mid-2021.

Metro returns to wholesaling

Metro will be focusing on its wholesale business. “Our origin is wholesale, wholesale is our future”, chairman Olaf Koch said. The German group wants to go back to its core business, now that the sale of the Real hypermarket chain to X+Bricks is almost complete and Wumei is taking a majority stake in Metro China. Once these sales have been completed, 70 % of Metro’s turnover will come from wholesale, including both hospitality and wholesale activities.

Metro expects to grow at the same pace as this year in almost all regions, with the exception of Russia, where the group expects better margins. Metro also expects to see better profitability in Germany and Western Europe next year.

Aldi combines media programs

Aldi Nord and Aldi Süd have combined all their media activities under one agency. The PHD agency is now responsible for the media strategy as well as planning and purchasing of advertising time or advertising space of the two discounters.

The aim is to make media control simpler and more efficient, and make greater use of potential synergies. All media measures and advertising campaigns will in future be more data-driven.

Aldi revamps vegan range

Aldi in the UK has revamped its vegan brand. The discounter will replace its I Am Vegan brand and its Meat Free Butcher brand with a new Plant Menu range. The new brand consists of 20 products initially. Aldi said it rebranded the range in order to appeal to both vegan and non-vegan customers.

Tegut expands private label

Tegut in Germany is launching a range of refrigerated products under the Freppy brand, composed of the English words “fresh” and “happy”. The range features 70 products, including salads-to-go, fruits-to-go, and ready-to-cook vegetables. The Migros Zurich subsidiary also is expanding its range in the premium Tegut vom Feinsten brand, the eco-label Tegut Bio and Tegut LandPrimus (meat and sausage). It is expected that 100 products will be launched, including 35 organic and 55 premium items.

Jumbo acquires Hema stores

Dutch supermarket retailer Jumbo is taking over 17 Hema stores in major cities. Six Hema railway station locations will also be selling Jumbo food products. Hema items, such as glasses, pans, drinking cups and tea towels, will in turn be placed in Jumbo stores. The Hema stores that move to Jumbo are being converted into Jumbo supermarkets. “We want to grow in cities. And large locations in inner cities are not so easy to find,” Jumbo said. It is expected the conversion will take three years.

Less plastic in Portugal

Sonae has opened its first supermarket in Portugal to adopt a single-use plastic free policy in its fruit and vegetable section. The policy has been rolled out in the Continente Bom Dia store in Porto and is part of the retailer’s Responsible Plastic Commitment. As an alternative to disposable plastic bags, shoppers can use cotton or polyester bags, which are reusable and washable, free paper bags or bring their own bags from home.

Continente is committed to reducing the use of plastic materials of fossil origin for private label products by 2025, instead focusing on reusable, recyclable or compostable packaging.

More people are eating alone

Meals across Europe are changing, as more people are eating alone and paying attention to one of their digital devices. New research from Mintel  shows that on average nearly a third of Europeans often eat every meal alone, while younger people are the most likely to use their phone as an eating companion.

However, other screens are also proving a distraction. In Britain, nearly three of every four people often eat meals while using home entertainment technology such as watching TV and gaming. They are joined by nearly 70% of Polish and more than half of Spanish and Italian consumers. It seems technology at mealtimes is less likely in German and French households.

In the Stores 

Carrefour is acquiring 28 Auchan stores from Conad. Most of the stores are in the proximity format and located in Lombardy.

Auchan expects its hypermarkets in France to report a loss in 2019, resulting from sales declines.

Amazon increased its e-commerce market share in the UK to more than 30% in 2019.

Auchan Retail has launched Cosmia Bio, a range of organic hygiene and beauty products. They are available in all Auchan stores in Spain, France, Portugal, Hungary, Ukraine, Poland, and Romania.

Netto Marken-Discount is introducing 70 premium products under the Lieblings (favorite) brand.

Edeka is introducing Respekt, a sustainable range of detergents and cleaners.

Rewe is marketing 30 drugstore products in China through the Alibaba subsidiary Tmall Global.

Bol.com will be responsible for the online distribution of Etos’ drugstore products. Etos products are also offered online by Albert Heijn, another subsidiary of Ahold Delhaize.

Market Research 
Organic sales climb in France

Sales of organic private label products are increasing in France. Nielsen reports that annual sales of private label organic products climbed more than 18% in value. While organic products now represent 4.7% of overall sales of fast-moving consumer goods, they accounted for 78% of the growth. While consumer goods increased by 1.1% in value, organic sales were up 21% to the growth of the segment. Nearly all French households purchase organic products and spend on average 150 euros per year on these products.  Among retail formats, the drive stores posted the highest sales gains of organic products.

Supermarkets win with ‘ready to eat’

Supermarkets in Spain are enjoying big sales increases in “ready-to-eat” foods. Kantar reports that sales of these products have climbed by 10%. “In an environment where the demand for food and beverages does not grow, the only way for the channel to continue to grow in volume is to achieve consumption occasions traditionally managed by others,” said  Kantar. Foods for lunch are the most popular, with meat and pizza dishes leading the way. The success of these foods at supermarkets has hurt sales at restaurants, Kantar said.

PLMA News 
Milan Roundtable to be held 26-27 February

PLMA’s 2020 Annual Roundtable Conference, to be held 26-27 February in Milan, will focus on how retailers and manufacturers can work together more effectively and efficiently.

The Conference begins on Wednesday afternoon, 26 February, with a report on the Italian retail landscape by Euromonitor. This will be followed by a store tour of major retailers in Milan.

On the next day the programme starts with a candid discussion of where the partnership stands now, what is right and what is wrong. Edgar Elzerman will moderate a panel of retailers and manufacturers. Next, Jon Wright of IGD will cover the best practices in sourcing, product development, and private label marketing.

There also will be presentations on the way in which the evolution of millennials and the emergence of the new Generation Z will affect retail practices. Mintel will offer conclusions from its new report on this trend.

For more information about PLMA’s 2020 Roundtable Conference, please contact PLMA International Council at conferences@plma.nl or telephone +31 20 575 3032.

Events 
26-27 February

Annual Roundtable Conference
Milan

26-27 May

“World of Private Label” Trade Show
 Amsterdam