PLMA E-Scanner – April 2019

April, 2019
Carrefour makes more cutbacks

Carrefour is taking more cost-cutting measures to reduce its store sales space. The retailer plans to reduce store space by around 10% of its current hypermarket portfolio and pledged to trim annual costs by 2.8bn euros by 2020, compared to 2bn euros in a previous plan.

The retailer is negotiating with unions to cut more than 1,200 jobs as it reduces the size of its large hypermarket stores in France.  The likely cuts and downsizing will result from the removal of jewelry corners and some service registers and service counters in favour of more digitisation and automation.  Carrefour has already cut 4,400 jobs in France, Belgium and Argentina.

While shrinking hypermarkets, Carrefour is investing in smaller stores.  The retailer plans to open 3,000 more convenience stores. In Belgium, Carrefour has launched its first walk-in click and collect store. The store aims to provide the range of a hypermarket in city centres, with customers able to select from 10,000 products online and place orders of 30 euros or more.

Monoprix wants Amazon expansion

Monoprix is working to expand its relationship with Amazon in France, following a successful launch in Paris. Monoprix said, “We are now covering all of Paris and we are working on a roll out with Amazon whose sole geographic constraint is the presence of Monoprix stores.  

The performance of the alliance is being closely watched since Monoprix was the first French retailer to agree in March 2018 to sell its products via Amazon. The Amazon Prime express delivery service has been operating in Paris since 2016, and the online retailer has made no secret of its desire to launch a grocery delivery service in France as part of its ambitions to expand in food retail.

Monoprix’s parent company, Casino, has an aggressive strategy to build its online business. Casino plans to reach 30% of its activity in France through e-commerce in 2021. By combining the development of its Cdiscount programme and the growth in online food sales through the Amazon, Monoprix and Ocado partnerships, Casino plans to almost double its e-commerce sales in France, climbing from 18% at the end of 2018.

Getting ready for Brexit

While British politicians keep struggling to come up with a Brexit plan, consumers are making their own plans. Consumers continue to restrain grocery spending, but discounters Aldi and Lidl are reaping the benefits. The two discounters had a combined market share of 16% in the UK during a recent quarter, an all-time high.

Conventional British grocers are seeing changes in consumer buying in preparation for a potential no-deal departure from the EU. Morrisons Chief Executive Dave Potts reports there had been “quite a pick-up” in sales of painkillers and toilet rolls in recent weeks. There are fears that a no-deal Brexit could cause disruption to food supply chains and lead to empty shelves in supermarkets. “In the event of things getting sticky at the ports, we’d look for alternative routes into the country,” said Potts. The retailer has obtained Authorised Economic Operator status, which should speed-up border checks in the event of hold-ups.

Potts revealed that Morrisons had brought forward some purchases of goods and packaging materials to support its manufacturing division, and stockpiled popular “cupboard fillers”.

Boots revamps store format

Boots in the UK plans for a major shake-up across its stores. The retailer will remove  traditional beauty counters from all of its stores. The counters will be replaced with what it calls “open furniture, trend-driven zones, play stations, discovery areas and live demonstration zones”. It means its make-up and beauty areas will be much more interactive for its customers than ever before.

The new beauty halls are being rolled out across 24 Boots stores and eventually will be in all stores. The beauty halls will be split into four zones: Beauty Live, an interactive window showcasing brand stories and experience demonstrations; Beauty Edits, providing inspirational stories and edits; Beauty Experience Zone, featuring personalisation, and interactions with some of shopper’s favourite brands; Beauty Discovery, showcasing Beauty trends and latest beauty finds curated by Boots to provide beauty inspiration.

Boots also will be introducing more than 20 new brands including Becca Cosmetics, Skinny Tan, Nip and Fab, Balance Me and more. These new brands will be rolled out across stores in the next six months.

Mercadona plans expansion

Mercadona plans to open 60 stores this year and will begin to expand outside Spain. The first 10 stores outside of Spain will be in Portugal, first in Porto and later in Lisbon. Mercadona has already acquired sites for 10 more stores and is aiming to operate around 150 in the next seven or eight years. The retailer also is interested in expanding into Italy. In both cases, Portugal and Italy, the retailer ruled out buying any local retailers.

Coop Suisse tests new format

Coop Suisse has opened a new concept store under the FOOBY banner in Lausanne. The store focuses on fresh, regional and sustainable products. Almost three quarters of the products are of sustainable origin. A new line of products under the FOOBY brand will also be sold in this store.   

Coop also reported positive sales from its organic and sustainable product assortments across all of its more than 2,300 stores. Sustainable products posted an 9.7% increase in sales in the full-year period, while organic product sales climbed by 19.1%.

Migros goes regional and sustainable

Migros reports rising sales for its regional and sustainably produced products, with sales of these categories, as well as its ‘aha’ healthy eating brand, increasing by 5.3%. Sales of its 'Aus der Region. Für die Region' range saw an increase in sales of 3.5%. In terms of sustainability measures, Migros has reduced its packaging footprint by 270 tonnes of plastics due to improved packaging.

Migros opened 26 stores last year, lifting its store count to a total of 727, while its market share increased from 21.8% to 22.1%. It also posted a 6.9% increase in online sales, which have more than doubled since 2014. Overall sales climbed 1.4% to more than 25bn euros.

EU bans single-use plastics

Single-use plastic items such as straws, forks and knives as well as cotton buds will be banned in the European Union by 2021. The European Parliament voted in favour of banning 10 single-use plastics including plates, balloon sticks, food and beverage containers made of expanded polystyrene and all products made of oxo-degradable plastic.

EU countries can choose their own methods of reducing the use of other single-use plastics such as takeout containers and cups for beverages. They will also have to collect and recycle at least 90% of beverage bottles by 2029.

Asda cuts plastics

Asda in the UK has removed 6,500 tonnes of plastic from its own brand packaging since last year. The retailer has reduced plastic in almost 1,000 individual product lines, from fresh fruit and vegetables to electronics and homewares.

Some of the changes that have been implemented over the last 12 months include swapping family chilled ready meal trays from black plastic to foil, changing pizza bases from non-recyclable polystyrene to fully recyclable cardboard, and replacing 5 million plastic bags on its bedding range with a cardboard band. It has also taken plastic covers off over 50 million greetings cards and removed plastic windows and film from over 1.6 million mince pies at Christmas.

In the Stores 

Edeka is planning to open shops specialising in organic foods.  Some of the shops, to be called Naturkind, will be inside large Edeka stores while others will be separate.

Tesco’s premium range, Exclusively at Tesco, is gaining popularity in the UK. The products went home in nearly a quarter of Tesco shopping baskets and sales reached 138m pounds in a recent quarter.

Auchan Retail, Casino Group, Metro and DIA have officially launched a new purchasing platform, Horizon International Services, following approval from competition authorities. Horizon was first announced last year and covers 47 countries across Europe, Asia and South America.

Aldi Denmark has signed a multi-year agreement with the country’s first and only master of wine, Jonas Tofterup, to revise and improve its wine offering. The agreement begins this month.

Mercadona plans to add its ready-to-eat ranges, consisting of 35 dishes, to 250 supermarkets.  

Carrefour in Poland has launched a range of organic pet food for cats and dogs under its Bio brand. The products do not contain gluten, dyes, sugars or flavour enhancers.

Auchan said the “Yellow Vests” protests in France reduced the retailer’s revenue by 140m euros.

Carrefour Belgium has reduced salt from its range of breads by 25%.

Albert Heijn is acquiring online nutrition start-up FoodFirst Network that offers subscribers healthy eating advice.

Norwegian retailer Meny has launched bread partly made of larvae flour. The coarse-textured bread, branded as Mjølmums, contains 2.1% dried and ground insect flour.

Coop Sweden is introducing juices and water in bottles made of recycled PET plastic.

Coop Denmark is working with online marketplace Råhandel, to enable local producers to distribute their products to stores.

Aldi has opened its first Local store in the UK. The shop is aimed at urban consumers and stocks 300 fewer products than the 1,800 found in the typical Aldi store.

Migros is testing a new type of online shop, called “my Migros”, which shows each user a personalised interface that allows for quicker checkout.

Marks and Spencer plans a big expansion in its food offerings, according to trade reports.

Mega Image, part of the Ahold Delhaize retail group, is acquiring ten stores from Zanfir, a supermarket group in eastern Romania.

Tesco has announced that all cocoa for its private label chocolate is now sourced from farms that are Rainforest Alliance Certified.

Lidl Hungary has announced that it will decrease the salt and sugar content of its own-brand products by 20% on average by 2025.

Lidl plans to open 31 stores in Romania.

Albert Heijn is removing plastic packaging from hundreds of fresh produce items.

Finnish retailer K Group said its market share rose by 30 basis points to 36.1% in 2018.

Waitrose in the UK has launched a collection of luxury body and bath products from celebrated cake maker Fiona Cairns.

Colruyt aims to replace the paper price labels with new electronic ones in all stores.

Portuguese retailer Continente has signed up to the New Plastics Economy Global Commitment.

Rema 1000 Denmark says organic food sales climbed 20% in 2018. Overall sales were up 11% for the year.

Italian retailer Migross has launched Wita, a range of health and wellness products under the Wita brand.

Consilia, an Italian private label manufacturer, posted sales growth of 11.4% in 2018.

Market Research 
Packaging gets connected

Mintel reports that “connected packaging” is one of the key packaging trends in the global packaging industry in 2019 and beyond. The researcher says: “Connected packaging is witnessing renewed interest, driven by growth in ownership of connected devices worldwide and advancement in technologies that link packaging to the online world. Marketers “have a wealth of options to connect virtually with packaging - from QR codes and other graphic markers to near field communication, radio frequency identification, bluetooth and augmented reality.”

Other trends to keep an eye on include reinventing the box, as online shopping set to gain further popularity and brands fully establish an e-commerce packaging strategy, and plastic-free, as the momentum behind plastic-free supermarket aisles grow, and brands must consider what kind of packaging solutions can give them shelf space.

UK shoppers like stores

The UK may be a leader in online retailing, but a new study finds that four fifths of UK consumers still prefer to purchase products in a store. A survey of more than 1,000 UK adults, by digital marketing agency Marketingsignals.com, found that 82% prefer in-store purchasing to online, as they have the product as soon as they have purchased it. Moreover three-quarters (78%) said that they like to visit stores to see and feel a product before purchasing it online.

PLMA News 
Salute to Excellence winners at “World of Private Label” seminar

Which retailers will come away with PLMA’s 2019 International Salute to Excellence Awards? You can find out at the pre-show seminars held at the RAI Exhibition Centre in Amsterdam on Monday afternoon, 20 May. The Awards honour retailers for excellence in private label products and packaging.  

The Awards will be followed by two presentations focusing on retail trends. The growth of Alibaba and its impact beyond China will be examined by Lidia Palubina, senior consultant e-commerce and omnichannel at Kantar Consulting. The future of traditional retailers as they face online competitors will be the topic of a presentation by Ben Miller, Global Insight Director, IGD.

The trade show will be held 21-22 May at the RAI Exhibition Centre.  The event will feature more than 2,700 exhibiting companies from around 60 countries, including more than 60 national and regional pavilions.  It is expected that the trade show will attract more than 15,000 visitors from more than 120 countries.

On the trade show floor, visitors can see innovative private label products at the New Product Expo, Idea Supermarket and Salute to Excellence displays.  

For more information about PLMA’s 2019 “World of Private Label” International Trade Show, please click here.

Events 
21-22 May

PLMA’s “World of Private Label” Trade Show
Amsterdam, The Netherlands