PLMA e-Scanner – September 2022
While their growth stalled or even declined at the beginning of the pandemic, the market share of discounters in several European countries rose again last year and has been accelerating in 2022.
In the UK, for example, Aldi has overtaken Morrisons and has taken its place among the so-called “Big Four” - largest supermarkets - in the country. Lidl is the fastest growing retailer in the country. The combined market share of Aldi and Lidl is now at around 17%. In the Netherlands, the share of Lidl and Aldi is also growing this year, going from 15.7 to 16.3% in the first seven months. In Germany discounters are doing much better than supermarkets and are expected to grow in double digits. Also, in France, Spain and Italy, discounters continue to show better performances than other grocers.
The gain in share is strongly driven by the fact that daily life has become considerably more expensive for many Europeans. This has driven more and more affluent consumers to discounters for their grocery shopping.
Europe’s sky-high inflation has changed consumers’ shopping behaviour. Price has become top priority for many and retailers have responded to this frugality.
French giant Carrefour announced a price freeze of 100 own-brand products corresponding to the daily essentials of its customers. The list of items includes breakfast cereal, coffee, tinned vegetables, detergent and diapers. E.Leclerc said last month that it would cap the prices on more than 230 of its essential products until early December, extending a price freeze it first introduced for 120 items in May. Both retailers have tied the programme to their loyalty cards.
In Denmark, Coop introduced a new programme called "Goi pris – hver dag” (Go price - every day) on 400 popular groceries and competitor Salling Group has put a price cap on 300 items. Polish retail leader Biedronka has committed to a price freeze of 150 of the most frequently bought items.
In addition, retailers are re-assessing their private label. Albert Heijn announced that it wants to grow the share of private label products, which now stands at around fifty percent. Asda introduced a price entry-level range called “Just Essentials”, comprising around 300 products. Sainsbury’s is increasing its Price Lock campaign which holds the prices of up to 2,000 own brand household and cupboard items. Rewe is expanding its popular economy brand “ja!” to over 1,100 items.
Across the board, consumer surveys indicate that shoppers are turning to private label as an alternative to more expensive manufacturer’s brands. Whether they buy it from discounters or supermarket retailers, the global cost of living crisis appears to be benefitting private label.
Last year, Amazon opened its first Amazon Fresh store in the UK. In the meantime, it has opened another 18 around London. All stores have the “just walk out” technology, where customers enter the store by opening the door with a QR code generated by the Amazon app on their smart phone.
In the store, customers just take the items they want off the shelves and put them in their carrier bag. Machine-vision technology in the store record which products have been taken. When the customer has all the items, he just walks out the store and Amazon bills them electronically.
Upon the launch of the first store in the UK, Amazon had targeted hundreds of Fresh stores. Now, while the number of UK subscribers is decreasing and there is less footfall in the stores, the retailer increases the annual Prime subscription from £79 to £95. Amidst worker unrest in its distribution centers over low pay rises, Amazon is said to be reevaluating its expansion plans.
Following a procurement agreement between Carrefour and Finnish S Group, products of the French giant's Terre d’Italia private label are now available in S Group’s grocery stores. The range includes traditional Italian delicacies, such as cheeses, oils, marmalades, sweets, salty and sweet biscuits, sauces and pastas, produced by small and medium-sized Italian manufacturers.
In addition, 80 Carrefour regular own brand products will be sold at the S Group’s stores, amongst other, tea, skin care products, juices and canned food. For S Group, the goals is to bring international variety to the customers and keep the favourites in its permanent range.
Gorillas, one of the grocery delivery companies that delivers products within minutes after customers has ordered them via an app is launching two new private label lines: Gorillas Premium and Gorillas Daily. The own label products are available in the Netherlands, Germany, France and the UK.
According to the company, the “Gorillas Daily” line offers high-quality products for everyday grocery needs at fair prices, such as bread spreads, cold cuts, cheeses, sweet and savory snacks as well as fruit juices. “Gorillas Premium" is composed of high-quality special products that customers can enjoy as a special treat or their daily luxury. Amongst others, the line includes fresh pasta, ravioli gnocchi in special flavours as well as cashews, peanuts, pistachios and almonds with a twist.
The new lines complement the recently introduced private label lines of beer, called <start-up beer> and “Hot Damn!” for coffee including beans, coffee grounds, home-recyclable pods and oat drink.
Carrefour has introduced a washing ball that revolutionizes laundry care by offering an ideal and economical alternative to conventional detergent. The washing ball, under the own brand Eco Planet, uses a new technology allowing laundry to be washed without adding chemicals.
Department store chain Hema is testing “walking cash registers”. Employees in the store that advise customers can immediately settle payment via an app on their smartphone.
Sainsbury’s has announced that it is changing its date labels on packaging for 276 own brand products in a bid to help reduce food waste in homes. Products include fresh fruits and potatoes. An on-pack message ‘no date helps reduce waste’ will instead be present across the fresh produce where the label changes come into play.
Rewe customers can now have their store's flyers sent to their cell phones via Whatsapp. The printed flyer will be discontinued by mid 2023. Tests have shown that a digital flyer via Whatsapp meets with great customer interest: both the registration rates for the service itself, the opening rates and the length of stay with the digital flyer has proven this.
Lidl and Waitrose are selling misshapen fruit and vegetables in an effort to support farmers who have been hit by the recent hot and dry weather that has dramatically lowered yields.
Penny has partnered with fast delivery service Wolt. Initially, customers can choose between 1500 and 2000 items. Soon, the complete Penny range should be available for order. If the test is successful, the offer should be available in all German cities where Wolt is active.
Aldi in Belgium uses QR codes on milk carton to encourage customers to use the supermarket’s digital flyer. While the paper advertising brochure is one of the most important ways to reach consumers, Aldi hopes to phase out the paper version in due time.
Spar has opened its first store in Latvia. The assortment includes products from local producers and other popular products and brands in the Baltic, as well as Spar private label products.
Intermarché in Portugal has been adapting the composition of its PorSi own brand food products, in order to reduce the amounts of sugar and salt. In an operation that started in 2019, it has accomplished a reduction of 19% in sugar and 28% in salt.
Meal deliverer Deliveroo will end its activities in the Netherlands. Spar worked with Deliveroo in seven Dutch cities. Albert Heijn recently expanded its collaboration with Deliveroo to include 1,200 products. The retailers will have to look for a new partner.
Waitrose is relaunching its own brand “Cook’s Ingredients” with more products and a new design and label. Some products were removed from the line and new flavours and products were added to reflect current cooking trends.
Colruyt has saved 8,000m3 of water with various measures. The group collects as much rain and wastewater as possible and purifies it so that it can be reused. The stores reduce their consumption of city water by recovering rainwater for sanitary and planting purposes.
German research by retail association EHI has found that the importance of the metaverse will increase in retail. In an online study among decision-makers from retail companies more than three quarters of respondents believe that metaverse offers exciting use cases. Six out of ten respondents believe that metaverse will remain. Its importance within retail companies is likely to increase over the next five to ten years.
However, only four percent of decision-makers believe that their company is likely to invest in metaverse applications. But, in the medium to long term, things look different. In five years, one in four retail companies could spend money on metaverse applications, and in ten years almost one in two.
According to the Healthy Lifestyle Monitor, which surveyed more than 5,000 people, more than half of the Dutch buy nutritional supplements. The most sold supplements (39%) are the private labels of the well-known drugstores, with the largest drugstore chain, Kruidvat, not surprisingly also being the most sold private label. Runner up is the own brand of Holland & Barrett with 10%. Almost three in ten supplements are bought in a physical store. Web shops account for 31% of sales.
Two decades of Private Label Education: PLMA’s Executive Education Programme will be back again at the campus of Nyenrode Business Universiteit, celebrating its 20th anniversary edition on 26 & 27 October! The programme is unique and devoted entirely to private label.
After two years of virtual education, PLMA is excited to present two full days of in person 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, consumer trends, marketing and e-commerce. The faculty is drawn from both the university and industry.
For more details on speakers, programme schedule and registration fees, please click here.
PLMA is the sole subject of the September special issue of Global Retail Brands, a trade publication with a worldwide distribution of 7,000 that describes itself as "your guide to the private label universe." The issue details PLMA's new survey, "Will Europeans Ever Shop the Same?," which was conducted in eight European countries and collected consumer attitudes on their shopping habits and behavior in the post-pandemic era. The issue also includes coverage of PLMA's 2022 Private Label Trade Show, set for November 13-15 in Chicago.
GRB publisher Phillip Russo said, "The findings and their implications are so significant, we were compelled to create this special edition and share the results with the industry." GRB is published four times a year by Kent Media Group and is distributed to senior level executives at the top 250 global retailers. Additional distribution occurs at leading private label fairs and trade shows.
Click on this link for a copy of the issue.
PLMA’s Executive Education Programme
Nyenrode Business Universiteit, The Netherlands
PLMA’s 2022 US Private Label Trade Show
E-Scanner is a monthly publication of the Private Label Manufacturers Association, Strawinskylaan 1873, 1077 XX Amsterdam, The Netherlands.