September 2024

Industry News
European private label sales rose to 355 billion € last 'year'

52-week sales of private label in Europe, as of July 2024, increased to 354.5 billion €, an all-time record. Private label turnover improved 6%, or 20 billion €.  In the same period, manufacturers’ brands sales grew 4%. Private label now makes up 39% of the total grocery market value in the 17 national markets tracked for PLMA by NielsenIQ.

For the period, the grocery market showed a small increase again in volume, after many declines, the volume in units of the total market rose by +1%. Private label was a driver here with a volume increase of +3% while manufacturers’ brands volume decreased by -1%.

European markets remain some of the biggest for private label globally, 11 markets have a private label share above 30%, and 6 markets are above 40%. The collective private label share in Europe's three largest markets -- Germany, the United Kingdom, and France -- is 40%.

Details including extensive product by product, category by category, and country by country figures are available for PLMA members and retailers at www.plmainternational.com.

Mega convenience stores flirting on merger

Canadian convenience store giant Alimentation Couche-Tard has reiterated its interest in acquiring 7-Eleven's parent company, Seven & I Holdings, despite the rejection of its $38.5 billion buyout offer. Couche-Tard expressed confidence that both parties could still negotiate a "mutually agreeable" deal.

Canadian Couche Tard operates around 16,7000 Circle K stores. Japanese Seven & I runs more than 85,000 7-Eleven stores globally. Although Couche Tard is smaller than Seven & I, it is valuated higher than the Japanese retailer. A merger would create the world’s top operator of over 100,000 convenience stores.

Musical chairs in purchasing alliances continue

Retailers’ international buying alliances are changing constantly, both those that are focused on big manufacturers’ brands and on private label. Here is an update of the changes that were announced in the past couple of months.

Rossmann, Germany’s second drugstore operator, is partly leaving RTG, the Retail Trade Group, at the end of this year. The retailer will cease the procurement of drugstore goods through RTG because “the strategic focus and the associated importance of the drugstore category is very different in individual companies.” Rossmann will continue buying food ranges through the alliance.

EMD is losing one of its powerful members with Kaufland leaving the alliance to switch to the Agecore alliance on 1 January 2025. Kaufland was worth more than 20% of EMD’s purchasing volume, which sees the volume reduced to around €90 billion. However, part of EMD’s loss in purchasing volume is compensated by the entry of above mentioned RTG in the alliance, at the same time.

Purchasing association Everest is going to collaborate closely with Swiss retail Migros in Asia. Everest Asiahub Limited was set up in Hong Kong, at the same address as Migros’ Asian purchasing. Some of the Migros employees will switch to Everest’s Asian hub. By purchasing together and directly in the Asian market, skipping the middlemen, the retailers expect to improve margins.

Migros France, a subsidiary of Swiss Migros, has announced that it will join Coopérative U at the beginning of 2025. The deal will enable Migros France to leverage Coopérative U's logistical, technical, and IT resources, while maintaining its managerial independence. Additionally, this transition will bring an evolution in the product offerings, notably with the inclusion of a selection of wines and spirits. The announcement comes a few months after the independent French regional group Schiever joined U.

'Smart' carts learning slowly

In the eyes of many retailers, intelligent shopping carts are one of the better solutions to a smoother customer shopping journey in the physical store. But the technology is complex and for now these carts have been introduced as trials only.

In France, for example, Monoprix and Franprix are testing smart carts from Israeli provider A2Z Smart Technologies. The plan is to roll out the test to 20 supermarkets of each banner. Last year, competitor Carrefour has been testing the same smart carts. The carts work with computer vision. Customers can simply place their items in the shopping trolley, where the prices automatically appear on a display, confirming that the products have been registered. The built-in scales allow for accurate pricing of goods sold by weight and also serve as a control measure. When done shopping, customers can pay directly at the trolley using the integrated card terminal.

Aldi subsidiary Hofer is trialling carts from US provider Instacart in Austria. Customers can scan items directly on the cart and weigh loose fruit and vegetables in the cart. Payment is made by card at a quick checkout or in cash at a at a service checkout without removing the items.

Aldi reaches record sales via global expansion

German retailers Aldi Nord and Süd collectively achieved a global turnover of €112 billion in 2023, an increase of 8.7%. The growth mainly comes from Aldi’s foreign activities. The company has expanded, partly through take-overs, in the US and opened nearly 100 new supermarkets around Europe.

The expansion push continues for now, with numerous store openings planned. Aldi wants to open 800 new stores in the US by 2028. In addition, it plans to increase its store network in the UK from the current 1,000 to 1,500 stores with an investment of € 948 million in expansion and refurbishing.

Despite Aldi's record sales in 2023, its major competitor Lidl remains slightly ahead. Lidl's revenue increased by 9.4 percent, reaching €125.5 billion.

Here come the robots...maybe

A report by Rabobank about the food industry shows that robotization will be the focus of food manufacturers in the coming years. Almost all food manufacturers the bank spoke to indicate that the lack of qualified personnel is one of the main reasons for robotization. In addition, working conditions, production costs, sustainability and flexibility are considerations to look into robotization.

Now that the tight labour market will remain a problem in the years to come, robotization offers the opportunity to achieve turnover growth without having to expand the workforce accordingly, do more with the same amount of people. In addition, robots can be deployed for specialist functions where there is a lack of skilled staff. Using robots for, for example, quality control, product placement or recipe dosing can lead to a smaller margin of error and hence, more consistent quality.

Besides the above-mentioned advantages, there are reasons not to invest in robots. The biggest barrier seems to be the current production process. The human production factor brings a lot of flexibility to the work floor. In order to earn back the investment in robots on a specific production line, certain minimum production volumes are often required. Private label producers in particular will have to examine the long tail in their range (recipes, packaging, etc.). Some manufacturers are reluctant to commit to certain product ranges or production volumes by investing in specific robots because contracts with buyers are often no long-term agreements.

PLMA Live.eu
The Key to Successful Buying and Selling

One of the major challenges of today’s modern leadership is understanding and communicating effectively in a five-generation workplace. 

Karen Green, experienced retail seller and buyer, and founder of Buyer-ology®, outlines her matrix and five-stage B-U-Y-E-R process to effectively profile targeted customers and ultimately increase success in selling opportunities.

Private Label Sales Surge in U.S.

Annual private label dollar sales in the U.S. have increased by 34% over the past four years. Judith Kolenburg shares an overview of this diverse and expansive retail market, which promises many opportunities for European players and their expertise on private label. 

In other news, Hans Kraak explains the rise and risks of the ketogenic diet, which inspired new product ranges and is expected to reach approximately 18.5 billion euros in value by 2033. 

In the stores

Albert Heijn has introduced a so-called look, smell and taste logo on its own brand yoghurt and buttermilk. The logo is made up of an arrow on the packaging, with images of an eye, nose and mouth and should make customers more aware of the shelf life of food and reduce waste.

As part of its 4Rs packaging strategy, Tesco is recycling bread bags and crisp packets into outdoor furniture and garden equipment for the UK National Health Service. The newly created products include benches, decking, tables, and raised beds.

Lidl is improving its loyalty app and introduces discount points that can be collected in the app, one paid franc is one Lidl point. Initially rolled out in Switzerland, the Lidl points can be redeemed for a product or discount.

Jumbo is expanding the sports shelves in its stores. Protein bars and shakes of its own brand and A-brands will be combined in one section. In addition, the sections will include products for endurance athletes such as isotonic drinks and energy gels, which contribute to energy levels.

Dia has concluded the renovation of its 2,400 own label products. Alongside this update, the company has introduced new, innovative items to match current consumer trends. Its private labels now make up 58% of customers' shopping baskets.

Aldi Nord is testing its first loyalty programme ever. The discounter chose Belgium as a testing ground. In the Aldi app, there is a new feature called “Aldi points”, customers create a profile in the app and receive a QR code that they can scan at the cash register to collect points. These can then be exchanged for discounts and free items.

Conad has announced that own brand products make up a third of total products sold. Own brand Conad products are in first or second place among the best-selling products in 75% of the product categories.

Superunie has launched a new own brand called “Go Vega!”. The new products of the purchasing organization include vegetarian and vegan meat substitutes.

Penny prints the prices of its own brand products in large font on the packaging. In what it calls a special edition, the products with an eye-catching design are part of a major price campaign.

Morrisons has launched menopause-friendly sections in some stores. The initiative aims to bring visibility to products that support the signs of the menopause. The sections will feature a range of accredited branded and own brand products.

Online only retailer Knuspr has launched its own baby brand called MODDIA Baby, the line focuses on quality at discount prices and comprises diapers, diaper pants, changing mats and wet wipes.

Market research
Study reveals 2% of retail & wholesale emissions are in sector’s control while 98% is tied to Scope 3

A joint study by Oliver Wyman and EuroCommerce, which examines the carbon footprint of the European retail and wholesale value chains, revealed that 98% of the European retail and wholesale sector’s carbon emissions are derived from Scope 3 emissions. Only 2% make up the sector’s Scope 1 and 2 emissions as a result of direct operations or energy consumed. In contrast, Scope 3 emissions are indirect and result from activities by producers and manufacturers along value chains, as well as the energy consumed after the purchase of a product.

While some retailers and wholesalers have made significant progress tracking and reducing emissions – especially Scopes 1 and 2 – the findings highlight the need for the sector to step up the efforts at the company, sector and value chain level to achieve net zero. It demonstrates the critical need to align further on a European and industry- wide methodology to quantify Scope 3 emissions and to identify where they can be reduced. 

One in two European households owns a pet

A survey among 36,000 participants in 10 European countries reveals that half of the households own at least one pet. The average age of pet owners is 46 years.

Cats are the favorite animals in Germany, Austria, Switzerland, France and Belgium. Special mention goes to France, which is the European country with the most domestic cats among pet owners (71%). Dogs are more popular in Poland, Hungary and Denmark.

In EU, Germans spend the least on food

According to a study by NIQ, consumers in Germany spend less of their income on food, health and care than in any other EU country. Despite the increase in prices, the share of these expenditures in private consumption last year was 13.4 percent, lower than in all other 26 countries.

Consumers have recently been paying more attention to prices and taking advantage of offers more often. According to NIQ, Germany recorded the strongest increase in promotion purchases in Western Europe, with an increase of 14 percent.

The share of retail in private consumption fell again in the EU in 2023. According to market researchers, this is due to a normalization of consumer behavior. During the Corona pandemic, consumers spent their money mainly in retail because cultural activities, events and travel were often not possible.

PLMA News
PLMA’s new survey of 1,000 retailers and manufacturers collected insights on growth prospects for private label across Europe

European private label manufacturers and retailers can expect to be very busy over the next few years, judging by preliminary findings of a new multinational survey of more than 1,000 industry executives conducted by PLMA which found that a majority of respondents see good times ahead for both private label and their own companies.

PLMA's 2024 study, “European Retailers & Manufacturers Talk About the Future: What will the private label landscape look like over the next five years?,”  consisted of about 30 multi-part questions. The comprehensive online survey was made available in English, French, German, Italian and Spanish. It was fielded for PLMA International by Surveylab in June-August.
 

The survey gathered insights from European retailers and private label manufacturers on critical issues including the relationship between manufacturers and retailers; product innovation and development; the influence of today’s environmental and societal requirements on the supply chain, and factors contributing to the prospects for the growth of private label throughout Europe.

PLMA commissioned the study to gain insights that will enhance the organization of the annual World of Private Label Trade Show, which in May conducted its largest event ever, as well as other association programmes that foster expanded opportunities for all players in the European private label industry.

PLMA’s Project Director Judith Kolenburg will present a summary of the report at the Private Label Summit in Milan on 29-30 October. Following her presentation, a panel of industry leaders, moderated by Edgar Elzerman, will analyse and assess the findings. A full report will be made available to PLMA members and retailers in November. For more information about the conference click here.

Events
PLMA's Annual Private Label Summit - Milan

At the Annual Private Label Summit, participants engage in a programme featuring presentations, panel discussions, networking opportunities, and a store tour delving into the retail landscape of Milan. The venue rotates annually among major European cities.

29-30 October 2024
Milan, Italy
Registration Details