PLMA E-Scanner – November 2019

November, 2019
Lidl posts strong profits

Lidl is posting strong profits in its Central Eastern European stores, according to reports from LZ Retailytics. It estimates that Lidl’s income from the Eastern business has doubled in the past few years. The profits are said to help fund Lidl’s battle against Aldi in other regions. Lidl is active in ten countries in the region, while Aldi is in only three.

According to financial data, Lidl earned 723m euros in these countries in the 2017-2018 period, up substantially from the 384m euros in these countries in 2014/15.  A Lidl store in the East generated an average of around 6.8m euros in net sales in the 2017/18 financial year. Overall, Lidl generated over 11b euros in net sales in the region over that period, accounting for nearly 15% of total European sales, LZ Retailytics reported.

Leclerc looks to buy Casino stores

Leclerc is said to be in negotiations to acquire about 60 Géant hypermarkets from Casino.  The transaction would exceed about 1.5bn euros, according to published reports. Any deal would have to be submitted to the Competition Authority.

The Casino Group also has announced the sale of more non-core assets, as it continues to work on lowering its debt levels.  Casino has sold 31 hypermarkets and supermarkets to companies associated with a US private equity firm. The sale includes 12 Géant Casino properties, as well as 19 stores under the Monoprix and Casino Supermarkets banners. Casino has signed an agreement to sell its Luché Tradition Volailles poultry production unit, in addition to selling 20 restaurants under the ‘A la Bonne Heure’ and ‘Coeur de Blé’ banners.

Carrefour to sell online site

Carrefour is in talks to sell its Rue du Commerce online shopping site to French e-commerce venture Shopinvest. The deal is part of Carrefour’s strategy to focus its online sales strategy on food rather than electronics. Carrefour says it had received a firm offer from Shopinvest for Rue du Commerce, which it bought the Rue du Commerce site back in 2015.

Aldi and Lidl plan Nutri-Seal labels

Aldi and Lidl are planning to put the Nutri-Seal nutritional label on their grocery products. Lebensmittel Zeitung reports that the two discounters are in favor of standardised nutritional labeling across Europe, but want to make sure that the programme meets the legal requirements in every country.

Aldi said it supports the introduction of the Nutri-Score system and intends to put the label on “relevant private label products”.  Lidl has announced that several products are currently being tested with the label on their packaging.

German Federal Minister of Nutrition Julia Klöckner has spoken out in favour of the seal, because the system had performed best in an official consumer survey. This result should be the basis for which model the government recommends for voluntary use on the front of the packaging.  The regulation must be approved by the EU Commission and the Federal Council must agree. The aim is for the new legal framework to be ready next year.

Introduced in France, the system incorporates sugars, fat and salt, as well as recommended ingredients such as proteins in a rating, and then gives a single value on a five-point scale from “A” on a dark green field for the most favourable balance to a red “ E “for the least favourable.

Retailers keep cutting plastics

Retailers across Europe keep cutting back their use of plastic packaging.

Aldi has set a goal of reducing the use of packaging materials by 30% by 2025. By the end of 2022, all private label product packaging will also be recyclable.

Schwarz Group has taken over the Austrian Sky Plastic Group through its subsidiary Greencycle. Sky Plastic processes plastic waste from bales, flakes, and produces PP, PE and PS recyclates.  

Spanish retailer Eroski has replaced the plastic used in packaging trays for bakery products with 100% recycled and recyclable PET plastic. The initiative will help the retailer to prevent the consumption of 250 tonnes of virgin plastic per year. By 2025, Eroski has pledged to cut the use of single-use plastics by 20%.

Waitrose in the UK has removed plastic packaging from multi-pack cans of its bestselling groceries.

Conad restructures organisation

Conad, the Italian retail cooperative, is restructuring its organisation. Conad PAC 2000A and Conad Sicilia have agreed to merge to form Conad Centro Sud, a group with an aggregate turnover of 4.5b euros and a market share of 23%, according to published reports. Scheduled to begin operations on January 2020, the new company is expected to generate a turnover of over 5.5b euros.

The move is part of Conad’s process of rationalising a number of its operational units to increase market efficiency. The merger represents the second phase of the process, which will see seven cooperatives merging to create four bigger companies.  Earlier this year, the directors of Nordiconad and Conad del Tirreno approved a merger resulting in the establishment of Conad Nord Ovest.

Conad also reported that the purchase of Auchan Retail Italia’s activities is proving more complex than expected. Complications have arisen with regard to discussions with trade unions, the retailer said.

Coop Italia makes investments

Coop Italia plans to invest over 500m euros to improve its range of products and services.  The cooperative is increasing its focus on environmentally friendly products, food welfare, and convenience, the Coop 2019 Report reveals.

It also reports that Coop’s private label products, which continue to grow in market share, will be at the centre of future actions. The report also says that Italians are spending less time in the kitchen, resulting in a boom in food delivery.

Tesco launches subscription plan

Tesco is launching a Clubcard Plus subscription programme.  Members who pay a monthly fee of 7.99 pounds per month will receive rewards that include a 10% discount on certain brands. The savings would depend on how much customers typically spend at Tesco each month. If a customer spends 100 pounds per shop twice a month, Clubcard Plus would save them 10 pounds on each of those shops.

Marks & Spencer debuts Halal ready meals

Marks & Spencer Food is launching a range of private label Halal prepared ready meals. A range of six Halal Food Authority (HFA) certified prepared meals has been rolled out across 36 selected M&S stores. The retailer has worked with HFA and suppliers to deliver Halal certified versions of its most popular prepared meals, including Chicken Arrabbiata, Chicken & Mushroom Tagliatelle, Chicken & Leek Bake, Chicken Hotpot, Chicken Jalfrezi, and Chicken Tikka Masala.

As well as going on sale in selected UK stores, the range will also be sold by M&S’ international franchise partner Al-Futtaim in markets including Singapore and Dubai.

In the Stores 

Tesco plans to increase rate of expansion of its Express format in the UK, opening 150 stores over the next three years, while doubling its online capacity.

Carrefour is introducing a beauty retail format under the Sources banner. The first Sources store opens in Paris.

Lidl is testing a grocery pick-up service in Belgium and has launched its mobile-based loyalty program Lidl Plus in the Netherlands.

Amazon is introducing a skincare line under the Belei brand in Germany, France, the UK, Italy and Spain. The online retailer also is introducing Tovess Gin, its first spirit brand in the UK.

Supermercato24 has acquired Poland-based Szopi. Supermercato24 allows shoppers to order from local supermarkets for delivery in 31 Italian cities.

Jerónimo Martins has opened its first checkout-free Pingo Doce supermarket in Lisbon. The store mainly serves students residing in a nearby university.

Superdrug in the UK has launched a free 30-minute click and collect service across all its stores.

Netto is expanding its online offer to more than 2,000 products in the food and drugstore sector.

Edeka has opened its first supermarket that offers only organic products.  The store, under the Naturkind banner, has a 500 sqm sales area and offers around 7,000 items.

Migros has introduced a dedicated section for Italian food products in its supermarkets, offering around 45 products made by 12 producers.

Aldi says it plans to have 300 stores in Switzerland within the next ten years.

Aldi and Lidl are expanding their ranges with vegan meat alternatives.  

Auchan in Portugal is adding the Nutri-Score nutritional labelling system in all private label products, according to published reports.

Metro has sold a majority interest in its Chinese operations to local retailer Wumart. Metro’s Chinese operations include 97 shops and real estate assets.

Spar has opened five stores in China.

Iceland in the UK is introducing a frozen vegan Christmas range that is palm oil-free and largely plastic-free.

Portuguese retailer Continente has introduced a range of chocolates made of UTZ-certified sustainable cocoa.

Sonae will invest up to 725m euros by 2021 in the expansion, maintenance and improvement of its supermarkets across Portugal.

Axfood says its Willys banner has posted strong growth and is benefitting from an increased online rollout.

Italian discounter MD plans to reach 1,000 stores by 2023. It currently has 780 stores throughout Italy.

Waitrose has added six private label SKUs in the wine, spirits, and cider categories.

Spar has launched a gluten-free range of sausages.

Dutch retailer Jumbo has launched a range of 10 gluten-free products, developed in association with the Dutch Celiac Disease Association.

Boots is offering biodegradable baby wipes made from viscose.

Biedronka added 32 stores in the third quarter and total sales rose nearly 11%.

Lidl is preparing to sell online in the UK for the first time via a new website or app.

Finland discounter Tokmanni has launched a range of cleaning and beauty products under the new Perfekt+ brand.

Makro has launched a range of biodegradable disposable household products in Spain.

Market Research 
Europe leads with organic launches

A new report from Mintel finds that Europe is leading the way in the introduction of organic food and drink products. Nearly a fifth of all new food and drink products in Europe during the past decade carried an organic claim, compared to only 10% from around the world. France accounts for 22% of all organic launches in Europe, followed by Germany (20%) and Spain (9%).

Mintel research shows that the share of organic food and drink launches in Europe with “suitable-for” (free-from) claims experienced impressive growth over the past ten years, rising from 20% to 43%. Ethical claims have also witnessed a similar increase. While 23% of all organic food and drink launches in Europe were positioned as “ethical” and “environmental” ten years ago, this proportion grew to 41%.

Shoppers want ethical and sustainable products

A majority of UK consumers believe personal care and beauty brands should put more effort into manufacturing products in an ethical and sustainable way, according to a Leatherhead Food Research survey of more than 2,000 consumers.

It found that 79% of consumers want manufacturers to put a higher priority on ethics and sustainability. Results showed women felt “significantly more strongly” about ethics and sustainability, with 85% saying more efforts should be made versus 73% of men making this statement.

PLMA News 
Milan Roundtable to be held 26-27 February

Registration is now open for PLMA’s 2020 Annual Roundtable Conference, to be held 26-27 February in Milan. The Roundtable Conference puts the spotlight on the private label partnership and best practices, which can make working together easier and more productive, from sourcing to shelf position.

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 to 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.

The conference will also focus 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 2020

Annual Roundtable Conference
Milan, Italy