Inside the minds of Rapid Delivery shoppers

In Spain, retailer DIA and rapid deliverer Glovo have analysed consumers who use the service for deliveries “within 30 minutes”. The typical customer places an average of 1.4 orders per week, with a smaller basket size (€10 to €15) compared to customers using traditional e-commerce channels (€25 to €30).

The most purchased products are beverages, eggs, dairy, and fresh items such as fruit, vegetables, meat, and fish. These are followed by bakery and pastry products, frozen goods and drugstore and cleaning products. In terms of order time, Saturday is the most popular day, followed by Monday. Most orders are placed mid-morning or mid-afternoon.

The analysis also revealed a 23% increase in orders on Sunday, 1st September, marking the end of the summer holidays, compared to other Sundays. Similar peaks occur after Christmas and Easter holidays. In addition, during the Champions League semi-finals last season, orders surged by 33%.

Lidl’s parent teams up with Google to redefine Cloud sovereignty in Europe

Lidl’s parent company, Schwarz Group, is advancing its strategy of controlling its business operations by partnering with Google to deliver secure and sovereign cloud-based collaboration for German and European regulated industries.

Through this partnership, Schwarz Group’s StackIT, the retailer’s cloud provider, will offer client-side encryption for customers’ Google Workspace data. StackIT ensures that customer data remains within the European Union, with full redundancy provided by backups hosted solely in European data centres to meet demands for data protection, residency, and resiliency.

“Germany and the EU have until now lacked enterprise-grade cloud collaboration solutions that fully address the sovereignty requirements of regulated industries, including ensuring all data is secured and backed up on local soil with absolutely no opportunity for access by foreign nations or platform providers,” said Rolf Schumann, co-CEO of Schwarz Digits, the IT and digital division of the Schwarz Group. “Our partnership and new offering with Google Cloud will fill this gap with an entirely new business model.”

Client-side encryption means Google has no access to customers’ data. According to Schwarz and Google, this safeguards the sovereignty of not only Schwarz Group, but also all customers who value the independence of their operations, giving them full confidence that their data is always in their control.

“This new partnership will enable the companies of Schwarz Group to combine its leadership in digital transformation with Google Cloud’s strengths in productivity, collaboration and security, enabled by our cutting-edge AI,” said Sundar Pichai, CEO of Google and Alphabet. “Together, we are opening up a world of new, sovereign opportunities for European organisations to innovate and build on our joint solutions, accelerating a new era of innovation.”

Intermarché’s bold private label rebranding and growth plans

Intermarché (ITM) aims to increase its private label share of sales from 35% to 40% by 2026, representing an additional €2 billion in turnover. The number of private label brands will be reduced from 32 to 25, and the existing 9,500 SKUs will be redesigned. Currently, 85% of Intermarché’s own brands are manufactured in France, with 40% of products carrying a Nutri-Score A or B.

To enhance brand recognition, the new packaging will feature the Intermarché name in red and black on a white band at the top. The revamped products will gradually be appearing on the shelves starting March 2025. The facelift should be completed in March 2027.

The retailer is investing 10 million euros in the rebranding process. Alongside the review of its existing range, 350 new products are scheduled to be launched next year.

Discover the Top 50 European retailers of 2024

Flywheel’s annual Top 50 list of European food retailers reveals that four German retailers are among the five largest companies by turnover: Schwarz Group (1), Rewe Group (2), Aldi (3) and Edeka (5). The ranking was based on the retailers’ gross sales forecast for the entire 2024 financial year. Schwarz Group stands far above its pursuers with estimated revenues of 186 billion euros, equal to the amount as the combined turnover of second-placed Rewe (€97.1 billion) and third-placed Aldi (€89 billion). French retailer Carrefour ranks fourth with €73.8 billion and Edeka closes the top 5 with €73.2 in sales.

Following them in the ranking are Tesco (€72.7 billion), E. Leclerc (€50.5 billion), Ahold Delhaize (€43.3 billion), Intermarché (€43.2 billion) and X5 Retail Group (€41.9 billion). All but one retailer in the full top 50 list reported sales grow this year. The only exception was French retailer Casino, which saw a 20% decline after years of debt-fuelled acquisitions and a declining market share. The list was published by Lebensmittel Zeitung.

Danish non-food chain accelerates expansion

Søstrene Grene had its strongest financial result in the company’s history in the latest financial year, according to its CEO, Mikkel Grene. The Danish company increased sales by 22% and profit went up 15%.

Its stores offer a wide assortment of home interiors, kitchen items, hobby articles, beauty, travel items, party supplies, gift wrapping, stationery, toys as well as seasonal items. Every week, new products land in stores. Prices are low, most products are sold under 10 euros.

The concept is different from other non-food discounters in that the atmosphere in the stores is special, focused on aesthetics and ambience, appealing to the customers’ senses. Goods are on wooden shelves and wicker baskets, with warm light and delicate colours. The layout draws the consumer into the depths of the store, while the sense of time is quickly lost. Almost all the items in the store are own brands.

After the strong results of the past 52 weeks, the company now wants to take the opportunity of the momentum and expand its network of over 300 stores to a targeted 500 stores within the next three years. The company operates stores and web shops in 16 European countries.

Countries, big brands strike out at popular Nutri-Score

Despite its widespread appeal, Nutri-Score has faced pushback in several countries, including Italy, Romania, Greece, Cyprus, the Czech Republic, and Hungary. Authorities in these nations argue that the system unfairly penalizes traditional products, such as those commonly found in the Mediterranean diet. Critics contend that Nutri-Score oversimplifies food evaluations by focusing on select nutritional factors, which can distort consumer understanding of a product’s overall health value.

In addition to governmental objections, major brands like Danone, Heineken, Unilever, and Arla Foods have expressed reluctance to adopt Nutri-Score on their product packaging. These companies argue that the algorithm used to calculate the scores doesn’t align with their national dietary guidelines, or that recent changes to the system have downgraded their products to lower categories, resulting in what they believe to be unfairly low scores.

Nutri-Score, a front-of-pack label (FOPL) system, uses a color-coded, traffic-light-like design to rate the nutritional quality of packaged foods based on their fat, sugar, salt, and calorie content per 100 grams or millilitres. A “Green A” signals the healthiest option, while a “Red E” represents the least nutritious.

Recent revisions to the Nutri-Score system have reclassified dairy and plant-based beverages. For example, solid yogurt, considered a meal food, is classified differently from drinkable yogurt, which is viewed as a beverage often consumed between meals, moving it from the general food category to the beverage category. This shift had a significant impact on product ratings, as the algorithm applies different nutritional criteria depending on the product category. As a result, certain dairy products that previously held high ratings of “A” or “B” dropped to lower ratings of “D” or “E,” largely due to their sugar content or the use of alternative sweeteners.

In the beverage category, only water maintains the top rating of a “Green A.”

Packaging at crossroads

The forthcoming EU Packaging and Packaging Waste Regulation (PPWR) is set to reshape the packaging landscape across Europe. The new legislation aims to drastically reduce packaging and packaging waste and will be implemented gradually starting mid-2026. It establishes ambitious goals for manufacturers and retailers, impacting both branded products and private label.

A turning point for packaging! A new era for packaging! Revolutionary! Game-Changing! Experts keep on finding new words to express what an immense change this law will bring. The final version of the law is expected to be published before the end of this year, officially setting the timeline for implementation. So, how will the PPWR impact the private label sector? The answer is clear: it will significantly alter how packaging is designed, consumed, and disposed of throughout the entire EU value chain. Businesses need to be ready.

As part of the EU Green Deal, the regulation has three core objectives: to reduce packaging waste, promote high-quality recycling, and establish uniform rules across all member states. While there was previously an EU directive on packaging waste, it allowed individual countries considerable flexibility. Now, with this regulation, standardized guidelines will apply across the board, with stricter enforcement.

To address these changes, PLMA will hold an in-depth conference on all aspects of packaging on 30 January 2025. The event will not only focus on the new PPWR legislation, but will feature a diverse range of packaging related presentations, covering topics such as private label packaging trends, innovation, creative design, sustainability, a look into the future, and consumer perception. It is a must-attend for anyone in the private label industry. For more information, click here.

Come and go in Everest Alliance: Aura Retail in, Super U out

In a surprising turn of events, Cooperative U, operator of the Super U supermarket chain, is set to part ways with the international purchasing alliance Everest, as well as the Epic alliance. The retailer joined the alliance only two years ago, partnering with the other members Edeka, Picnic and Jumbo. The split is reportedly due to internal disagreements among the partners, potentially around strategic approaches or negotiations. Everest negotiates purchasing prices for its partners with more than 50 multinationals. Epic Partners includes Edeka, Jumbo and Picnic, as well as Migros Group, Jerónimo Martins and Esselunga. Epic negotiates with major suppliers for top-quality conditions for international marketing campaigns.

Just days after Cooperative U’s departure was announced, Everest and Epic welcomed a significant new member: Aura Retail, a French food purchasing powerhouse. Aura Retail stated that it wants to negotiate the best pricing conditions with the biggest multinational manufacturers, thus allowing more advantageous prices for its customers. With Aura Retail now onboard, Everest is expected to rival the size and influence of Eurelec, a key alliance between E. Leclerc, Rewe, and Ahold Delhaize.

Meanwhile, Aura Retail, Everest’s new partner, recently published details of this new partnership forged between Intermarché, Auchan and Casino. The French alliance comprises five operational structures offering purchasing partnerships between the three groups for an initial period of 10 years. For food purchases, Aura Retail will be made up of three central purchasing units managed by Intermarché. For non-food purchases of national brands, two structures have been set up by Aura Retail and managed by Auchan. Private label is part of the portfolio of the alliance.

With the departure of Cooperative U and the entry of Aura Retail, Everest is undergoing a significant transformation. The evolving makeup of these international purchasing alliances reflects the increasingly complex and competitive nature of global retail. As large retailers seek to enhance their negotiating power with multinational suppliers, these alliances will continue to shift in response to both internal dynamics and external market pressures.

The inevitability of AI in retailing never more apparent

Artificial intelligence is increasingly being integrated across various functions within retail businesses. Carrefour recently demonstrated how it leverages AI to enhance its commercial offerings and optimize stock management, both in stores and warehouses. AI tools assist store managers in making data-driven decisions about product placement, quantities, and shelf arrangement. These algorithms consider factors such as location, weather, and population demographics, providing precise insights for decision-makers. Additionally, AI is now being used for pricing and promotions, tailored down to the store and product level. Data from loyalty cards or apps plays a crucial role, offering models real-time, customer-specific purchasing behaviour.

Tesco is another retailer harnessing the power of AI. It has announced plans to utilize AI to introduce a new initiative: using loyalty card data to encourage customers to choose healthier and more affordable alternatives. By analysing customer shopping habits, the AI will provide personalized product suggestions aimed at delivering greater value to shoppers.

Albert Heijn has introduced a new feature in its app, called "Scan & Cook," aimed at helping customers reduce food waste. The feature allows users to snap a photo of items in their fridge or pantry and upload it to the app. Using this technology, which will be further enhanced throughout the year, the app then transforms the ingredients into personalized, delicious recipes with just one click. This is one of the Generative AI applications that Albert Heijn has developed, implemented, and is now rolling out.

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.