Lidl is rolling out a new store concept in Germany and Belgium. While the retailer has been modernising and upgrading its stores for years, it is now moving in the opposite direction and back to the traditional no frills concept. Lidl is faced with higher growth rates of competitor Aldi, and changing the layout of the stores is one measure to compete.
The new layout is not only meant to visually let consumers perceive the retailer more as a discounter, but it should also make it easier for employees to stock shelves.
In Belgium, all Lidl stores will be simplified so that they will have the same layout. Customers are to “recognize” the store and its layout wherever they are. For employees the new concept should boost efficiency.
In an attempt to decrease inflation, the Hungarian government has introduced new economic regulation changes. As of 1 August, grocery retailers are obliged to offer one product in each of 20 product categories at a discount of at least 15% for a week.
The measure replaces an earlier rule that forced a discount of 10 percent as of 1 June. Retailers also have to make sure that there are sufficient stocks of the discounted products. In order to be able to check prices, large retailers have to publish their current prices in multiple product categories on the Cartel Office’s website. Consumers can report violations of the rule and there are high fines of up to € 100.000.
At the same time as the introduction of the mandatory 15% discount regulation, the government ended the its food price cap policy. The price caps applied to a wide variety of products such as granulated sugar, wheat flour, sunflower oil, pork, chicken meat, milk, chicken’s eggs and table potatoes.
The Romanian government has introduced a decree that caps the profit margin for fruit, vegetables and a dozen other basic fresh produce items. Retailers and cash and carry operators are not allowed to add more than 20% to the purchase price.
Meanwhile in France, Economy Minister Bruno le Maire has reached an agreement with food retailers manufacturers to cut prices on 5,000 products including pasta, poultry, grains and oil. Competition and fraud prevention agency DGCCRF will regularly check supermarket prices and there could be sanctions against companies that do not comply with the rules.
Following the agreement in France, the Belgian Economy Minister Pierre-Yves Dermagne has asked food manufacturers to lower prices. Since prices for energy and some raw materials have been falling on the world market, he expects to see a lowering of prices in supermarkets. The food industry is against a mandatory price reduction and has urged the government to apply different measures such as lowering wage costs and not increasing VAT on food.
Auchan has bought all of the Dia group's activities in Portugal. Auchan currently has more than 70 stores here and the acquisition means that almost 500 stores will be added to its network. In addition, Dia’s three warehouses are included in the deal.
Auchan which is historically more concentrated on hypermarkets, has in recent years been trying to grow in the proximity channel. The deal includes all of Dia’s convenience stores under the Minipreço and Mais Perto banners. It makes Auchan in one fell swoop the largest retailer in number of stores, it will strengthen its omnichannel offer and gives it a presence throughout the country. All employees will be transferred to Auchan. The business follows Auchan’s prior acquisition of over 200 supermarkets from Dia in Spain.
The new “Horizontal Guidelines”, EU rules on joint retail purchasing, have come into force on 1 July. They provide the legal framework for retail and wholesale alliances in Europe. The revised rules show that the Commission assesses international retail alliances as generally permissible and positive in terms of consumer welfare.
Christel Delberghe, Director General of EuroCommerce – the association representing European retailers and wholesalers, commented: “The revised horizontal guidelines affirm the many benefits that joint buying brings to consumers and industry, including better prices, choice, efficiencies and innovation. They also usefully confirm that retail and wholesale alliances may be set up in various ways and engage in different activities – from joint sourcing to joint negotiations of terms and conditions – to help retailers and wholesalers negotiate and bring better prices to households.”
The guidelines also recognise that a key element when assessing the effects of alliances is the countervailing selling power of suppliers – including whether they offer “must-have” products that retailers and wholesalers need to place on their shelves if they want to attract consumers.
The new rules offer helpful guidance on what can and cannot be done when negotiating with suppliers –reiterating the value of hard bargaining for consumers. They also confirm the many positive effects such negotiations can have on consumers, who benefit from better prices and more choice, and for suppliers, who can expand their distribution networks and innovate more.
In the light of the new guidelines, it comes to no surprise that the Commission has ended its investigations into the Agecore and Coopernic retail alliances. The authority sees no signs of an antitrust violation by the international purchasing cooperations.
With the decision, the Brussels competition authority is clarifying a legal issue that has long been controversial between retail companies and big manufacturers. National and European brand associations have always criticized the so-called "on-top" conditions of the European retail alliances as an unjustified demand that is not matched by any concrete commercial reward. The retail side, on the other hand, sees the alliances as an important tool to negotiate more effectively with suppliers on an equal footing in order to offer consumers lower prices and more choice.
In France, debt-burdened Casino has sold 119 of its stores to competitor Intermarché. Half of the stores will be rebranded as Intermarché this year and the other half will follow suit within the next three years. Auchan and Lidl were also interested in taking over stores from Casino.
Casino has accepted the offer of a creditor consortium led by Daniel Kretinsky to avert bankruptcy. The agreement says that 1.2 billion euros of new money will be injected into Casino and its debt of 6.4 billion euros will be restructured. The consortium will end up with the majority of the Casino shares, between 50.4% and 53%. The deal means an end to the 30-year power of Casino CEO and major shareholder Jean-Charles Naouri.
The consortium aims to finalise a binding lock-up agreement this month and complete all restructuring in the first quarter of 2024.
Tesco is the first retailer to cover the cost of VAT, 20%, on its range of period pants. The permanent reduction in price is across all eight lines of Tesco’s own-brand F&F period pants.
Online supermarket Picnic is expanding its range to include drugstore products. Hundreds of items are added every week. The Picnic drugstore should be up and running by the end of the year.
Spar Croatia is promoting healthier consumer habits through the ongoing reduction of excessive sugar levels in its own brand ranges. 160 products have already undergone successful recipe alterations, resulting in sugar reductions of up to 80%.
Delhaize is lowering the price of several hundred items under the own brand 'P'tits Lions', bringing the number of discounted products to 1,000.
Netto Marken-Discount customers have a new feature in the app which is a first for food retailers. If a customer doesn't have a coin to unlock the chain on a shopping trolley, they can do using the app.
Deliveroo has introduced an app feature that allows customers to top up takeaway orders with grocery items. Its grocery partners, including Co-op, Sainsbury’s, Waitrose and Morrisons, will be leveraged to offer the groceries.
Asda launches a new scratch-cooking ingredient range to help more people to cook from scratch. The Cook by Asda range includes over 40 brand-new products spanning more than 10 cuisines.
Kaufland presents a new pet food brand called K-Carinura, the products for the different animal species are colour-coded. A total of 60 products are to be offered in the coming months. Further product lines are planned for 2024.
Alcampo introduces Zero Waste products under its own brand Cosmia. Products include washable make-up remover pads and a sponge made from the Konjac plant.
Carrefour is showing the volume of CO2 generated by online orders, a first for a food retailer. Once a customer validates his online order, he sees the total number of kilograms of greenhouse gases generated. The aim is to make consumers aware of the environmental impact of their shopping.
Continente brings a new range of breakfast products and snacks for children to market. The new range is part of the Continente Equilíbrio private-label brand. It consists of breakfast cereals, yoghurts, fruit juices and enriched milk.
Aldi Süd starts a customer loyalty program with a new tester club. In return, the retailer offers consumers prizes and cashbacks. It gives Aldi a chance to collect feedback as well as strengthen relationships with customers.
Penny Italy has revealed its own brand for aeroponic vegetables. The products under the "Pianetiamo" label are produced with a special form of vertical farming, originally developed for space travel.
Migros uses a virtual escape room to lure customers to its stores. In order to unlock new items in the online game, users need to spend money in the store. Who manages to escape has a chance to win great prizes.
Research by Circana reveals that sustainability is becoming a greater part of innovation, with a greater number of manufacturers and consumers alike making it a priority. The company documented product innovations in six European markets, UK, Germany, France, Spain, Italy, and the Netherlands. While innovation in product launches overall decreased significantly - by 16% - since 2021, the report found that sustainability had in fact been normalised among the public.
When asked what they notice in new products when they hit the shops, 68% of consumers say that they notice when it’s better for the environment, whereas 61% notice when it’s better for others. Many consumers also link sustainability with innovation. 60% believed that innovative companies also were more sustainable.
According to Ananda Roy, senior vice-president at Circana, retailers are the drivers of sustainability.
Nearly 6 million Dutch, fully 41%, used nutritional supplements such as vitamins and minerals in the past year. They spent a total amount of €1.6 billion, €200 million more than the previous year. This was announced by Multiscope who compiled data from more than 5,000 people through the Healthy Lifestyle Monitor.
Users of dietary supplements from the study often choose private label. There are three own brands in the top five most purchased brands of nutritional supplements. Almost three out of ten users of nutritional supplements opt for the Kruidvat own brand (29%). Next are Lucovitaal (16%) and Holland & Barrett (13%). Davitamon (11%) and Etos (4%) round out the top five.
If you want people in your company to be passionate about private labels, you need to build a culture that will enable and promote that. How can you build such a culture? There is a simple enough recipe you can follow, as long as you include two key ingredients.
Spoiler alert: you cannot change culture simply with training.
PLMA and Fernando Lanzer, author of “Organizational Culture and Climate: Understanding, Maintaining and Changing”, will organize a one hour-long webinar about Understanding Your Company’s Culture: The Key to Building Private Label Passion on 27 September 2023.
For more information or to sign up click here.
The private label business can be complicated and challenging. But PLMA can give you the power and the knowledge you need to be successful at it. PLMA’s Executive Education programme takes place at the campus of the Nyenrode Business Universiteit, one of the pioneers in European business education, and the programme is devoted entirely to private label.
PLMA’s Executive Education Programme will be held 25-26 October 2023 and includes lectures and interactive sessions, designed for both manufacturers and retailers. The curriculum covers what executives need to know about private label: private label strategy, manufacturer-retailer relations, new product development, a retail case study, supply chain logistics and retail trends and the implications for Private label. Retail speakers include Tore Hoylie, Head of Innovation and Own brand of Rema 1000 Norway as well as former Sourcing Vice-President of Walmart Arjan Both. A guided visit to important Dutch retailers is also part of the programme.
Learn from industry professionals, interact and network with the attendees and make your private label business future-proof!
For more information or to sign up click here.
PLMA's Online Lunch & Learn Online Speaker Series
PLMA's Executive Education Programme
Nyenrode Business Universiteit, The Netherlands
PLMA’s U.S. Private Label Trade Show
E-Scanner is a monthly publication of the Private Label Manufacturers Association, Strawinskylaan 1873, 1077 XX Amsterdam, The Netherlands.