PLMA E-Scanner – June 2017
The popularity of private label keeps growing across Europe. The latest Nielsen data shows that market share for retailer brands has climbed to all-time highs in 9 European countries and for the first time stands at 30% or above in 17 of the 20 countries tracked for PLMA’s International Private Label Yearbook.
The 2017 Yearbook statistics reveal that private label’s market share reached all-time highs in Germany, Italy, The Netherlands, Belgium, Poland, Austria, Sweden, Norway and Denmark.
The biggest market share increases were posted in Austria, up 2.8 points to 43% and Germany, up 2.1 points to 45% and Poland, up 1.4 points to 30%. Seven countries now have market shares of 40% or higher: United Kingdom, Germany, Austria, Belgium, Switzerland, Spain and Portugal.
Aldi will emerge as Europe’s second largest grocery retailer, trailing only Lidl, within three years. That’s the prediction of LZ Retailytics, Lebensmittel Zeitung’s new analyst group. It says the discounter’s sales will exceed that of Carrefour, Tesco and Metro by 2020.
LZ Retailytics expects promising growth for Aldi Süd to come from the UK, where sales densities are higher than in any other market. Aldi Süd UK makes 15mn euros per store there, which compares with 8mn euros in its German home market, and 5mn euros at Aldi Nord. New market entries include Italy, and potentially Romania. For Aldi Nord, Spain is looking promising.
The analyst noted that in recent years, Aldi seemed to be in a rather defensive position in several European markets, including Germany, the Benelux and southern Europe. Market saturation, the limitations regarding range size and complexity, together with aggressive expansion from Lidl have all exerted increasing sales pressure on Aldi Nord and Süd. The discounter is responding to these challenges by upgrading its stores and improving pricing and communication strategies. So far, the results have been successful, according to LZ.
Private label sales are a “'major source of growth” for UK retailers, according to Kantar Worldpanel. It reported that private label sales of Britain’s ten biggest retailers climbed 6% in the 12-week period to 21 May. By comparison, sales of A-brands products increased by only 0.6% over the same period.
Kantar said premium private label ranges “are continuing to see huge growth.” It cited Morrisons launch of ‘The Best’ private label range last year, which has “attracted more affluent shoppers through its doors, helping Morrisons become the fastest growing big four retailer.”
There also have been gains in economy ranges. Asda's revamped Farm Stores range has helped to increase sales of the grocer’s lowest tier by over 20% year on year.
Discounters are gaining market share in Germany. In the first three months, the sales growth of discounters was “about four times as high as that of the classic supermarkets,” according to a study by GfK. While the supermarkets reached a turnover increase of 1.1%, the discounters increased by 3.9%. According to GfK, market leader Aldi even made a 5.6% increase. “This means that the discounters are overshadowing all other sales channels”, says the study.
The trend reversal comes as a surprise to some analysts, since the discounters had been losing market share to traditional supermarkets in recent years. Some observers say rising inflation may be attracting more shoppers to the discounters’ low prices. Others credit moves by the discounters to improve the shopping experience, introduce premium products and promote with effective television advertising.
A-brands are going online to sell directly to consumers. An online marketplace for A-brands, called Shobr, allows manufacturers to bundle their direct sales to consumers. Shobr will begin with a soft launch after the summer and will expand at the start of next year. Plans call for the opening of a distribution centre by the end of this year. There is a minimum order quantity, but delivery is free and at the time desired by the consumer, usually the next day.
The Shobr initiative has been rolled out in Denmark in collaboration with the Danish A-brand association SLF and a number of A-brands. The Carlsberg family is one of the financiers. Shobr will offer both food and nonfood products.
Two French retailers are expanding their vegetarian programmes. Carrefour reports its Carrefour Veggie range has grown by 17 items in the grocery and beverage departments. This summer the vegetarian range will have 32 products, 22 of which are vegan, without any animal protein. During the year 2016, two million Carrefour Veggie products were sold. Within Carrefour, Carrefour Veggie represents nearly one in two vegetarian products sold. “The development of the vegetarian offer reminds in many ways of the growth of the organic market,” says the retailer.
Meanwhile Intermarché has launched a brand dedicated to vegetarian cooking. Veggie Marché includes a range of 9 products. The first items are in the self-service deli department, but will be expanded to frozen and in then to groceries next year. In the fresh department, the range includes aromatic soy steaks, a wheat-based escalope, lupine and peas, falafels, nuggets, lasagne and a vegetable burger.
Intermarche, E. Leclerc and Auchan are the first retailers who will use France’s official voluntary, nutrition label. The nutrition logo, NutriScore, was adopted as France’s official label and receives the backing of the World Health organisation, which praised it for being “straightforward” and easy to understand. Under EU rules regarding the single market, however, it can only be applied on a voluntary basis.
Sainsbury’s is introducing a sustainability standard it says will change the way it sources key crops and ingredients, and build better relationships with producers throughout its supply chain. Sainsbury’s Sustainability Standards would be rolled out across categories including bananas, coffee and prawns, starting with a pilot project on key private label tea lines, which will drop their Fairtrade certification, and start carrying a Sainsbury’s Fairly Traded logo.
The move raises questions about the retailer’s ongoing relationship with the Fairtrade Foundation after it declined to work with Sainsbury’s on the tea trial.
Finnish retailer S-Group is offering selected products from Tesco’s private label range in its stores. Prisma, S-Market and Alepa stores will now feature around 200 products from the British retailer. The items include the Tesco Finest luxury food line and its Free From range, featuring products for those with coeliac disease and other allergies, which will significantly increase the amount of gluten-free products that are available in S-Group stores.
Carrefour aims to double its sale of organic products in France in four years. The retailer’s Bio 2021 programme includes a major expansion of its Carrefour Bio specialist stores.
E. Leclerc is adding ten products to its Repère Bio Village range.
AholdDelhaize could well move its main office to the United States sometime in the future, but not anytime soon, said CEO Dick Boer.
Auchan has launched a campaign to promote ‘good, healthy, and local products’ in 14 countries. The initiative includes reviewing private label products to increase nutritional value.
Migros in Switzerland has launched ‘You’, a health-oriented brand that features sugar reduced products and superfood snacks. All products have a simple and natural list of ingredients.
Tesco is introducing a vegan logo across its private label range.
Coop Suisse is planning a new retail format network aimed at vegetarians, to be named after its Karma private label, according to published reports.
Monoprix has introduced “La beauté du visage” brand with a range of around 30 toiletries and facial care products.
SUN, the Italian retail consortium, reported that its Consilia brand posted a 27% sales gain.
Sainsbury’s has revamped its food-to-go range to include 21 new products such as Asian buns, gluten-free sandwiches and vegan options.
Axfood is looking to expand its meal kits sales through the acquisition of Middagsfrid, which delivers groceries with recipes throughout Sweden.
Casino is working with three animal welfare organizations on a new label that will provide guarantees on the conditions of rearing and slaughter.
Coop Denmark is introducing a combined mobile scanning and payment app, Bip & Betal, to all its Fakta discount stores in 2018.
Coop Sweden has launched a range of eight cold-pressed raw juices and smoothies.
Private label now accounts for more than half (54%) of grocery purchases in Ireland, according to Kantar Worldpanel.
Co-op in the UK has pledged to make all of its private label packaging recyclable, with an interim goal of 80% recyclability set for 2020.
Waitrose says its premium Waitrose 1 range is being exported to India and China.
Lidl has opened an online shop in China on Alibaba's Tmall Global platform.
Eroski has launch a convenience store format under the Rapid banner.
Morrisons in the UK is selling its private label products in Hong Kong.
Eroski in Spain lowered the prices on up to 7,000 of products in its hypermarkets and 1,000 items in its supermarkets.
Mercadona has been voted as the best retail company in Spain.
SuperValu remains the largest supermarket in Ireland, capturing 22.8% of grocery sales.
Spar Austria has introduced a reduced-sugar sweetener, Vital Brikenzucker, as part of its focus on sugar reduction.
Systeme U is dropping its Bien Vu economy own brand.
Aldi is planning to enter the Romanian grocery market and has started recruiting its local management team there.
Dm is revamping its assortment in Austria, adding 1,900 products, mostly in the cosmetics and organic food categories.
Spar Ukraine is set to add 50 stores over the next three years.
Albert Heijn has added spaghetti squash to its range of fresh pasta products.
Jumbo in The Netherlands has opened a new convenience store concept, Foodmarkt City, in Groningen.
The UK food and grocery market is forecast to grow by 15% during the next five years, giving it a value of 213bn pounds, according to an IGD report. It is predicting growth across all the major grocery channels, with the discounters set to put in a particularly strong performance driven by ambitious store opening programmes, new store formats and range investment.
IGD is also predicting that the convenience channel is poised to grow by close to 18% over the next five years, to be valued at 47bn pounds. Data indicates that more than nine out of ten UK grocery shoppers visit a convenience store. A majority of consumers said they choose to shop in convenience stores because they are ‘quicker to get around’.
Innovation by retailers with their private label took the spotlight at PLMA’s 2017 International Salute to Excellence Awards programme. More than 100 products from 39 retailers in 20 countries were selected by panels of judges consisting of industry experts, including chefs, masters of wine, former retailers, academics, nutritionists, journalists and packaging specialists.
Nearly 700 food and non-food products by 83 retailers from 28 countries were considered for the Awards. Entries were evaluated for taste, appearance, packaging, presentation, product concept, and value for money. The most Awards were taken by the Spanish retailer Eroski, which was recognised for 11 products, five foods, three non-foods and three wines. Aldi UK won seven Awards, including five for its wines. Aldi and Lidl in Germany each won five Awards, as did the French retailer Intermarche.
All the winning products can be seen online at www.plmasalute.com.
PLMA’s Executive Education Programme
Amsterdam, The Netherlands
US Private Label Trade Show
E-Scanner is a monthly publication of the Private Label Manufacturers Association, Strawinskylaan 671, 1077 XX Amsterdam, The Netherlands.