Grocery Retailing in Europe: Market Size, Retailer Strategies and Competitor Performance
NEW YORK, Aug. 8, 2011 /PRNewswire/ -- Reportlinker.com announces that a new market research report is available in its catalogue:
Grocery Retailing in Europe: Market Size, Retailer Strategies and Competitor Performance
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Introduction
The grocery market in Europe has rebounded from a severe downturn with total grocery spend growing by 2.2% in 2010, driven by an improvement in consumer confidence along with rising food prices. However, as recovery remains weak and the market is becoming increasingly saturated, slow growth will prevail, prompting grocers to diversify into new products, channels and locations to gain market share.
Features and benefits
* Benchmark your company's performance by accessing profiles of leading grocery retailers including key financial details and market shares.
* Make informed strategic decisions based on our assessment of new initiatives being adopted by sector players.
* Assess the potential of new markets by uncovering trends in grocery expenditure, specialist sales and store numbers across the EU27 region.
* Boost sales by diversifying your brand into our recommended store formats, locations and product categories.
* Enhance footfall and grow market share in saturated markets by uncovering the most effective strategies to develop your online operations.
Highlights
Competition in the grocery market is intensifying across the region. Consequently, retailers are diversifying into new types of products. High awareness of Tesco's F&F clothing brand in central Europe has prompted the retailer to open a stand alone F&F store in Prague, Czech Republic with more to follow, including one in Warsaw, Poland.
Developing online operations is becoming an effective means for grocery retailers to boost sales with minimal expansion costs. Although online shopping remains underdeveloped in Germany, Rewe launched its Rewe Drive service in Frankfurt in March 2011 to attract commuters in the area and save costs on home delivery.
Grocery expenditure in eastern European countries, such as Bulgaria and Slovakia grew at above average rates in 2010 and is forecast to grow strongly between 2010 and 2013. Consumer spend rebounded quickly in the region and foreign players continue to invest in the area, leading to market consolidation and a boost to grocery spend.
Your key questions answered
* Which grocery players command the largest shares of grocery expenditure and specialist sales in the EU27 region?
* What are the key drivers for growth in grocery spend in each of the EU27 countries and what are the recent key developments in each market?
* Which European markets should I consider entering? Which markets performed the best in 2010 and which will grow the most until 2013?
* How can I improve my online operations to drive footfall and continue to grow market share? What are my competitors' activities in this channel?
* What products and services should I develop to improve my margins and sales densities? How can I diversify my non-food range to drive profitability?
OVERVIEW
Introduction
Summary
KEY FINDINGS
Grocery expenditure is starting to recover after a slump in 2009
Intense competition is leading to a slowdown in sales growth
Accelerated expansion by the leading players is pushing independents out of the market
Stable growth will resume in most markets after 2011
Eastern Europe offers strong prospects for future growth
Discounters continued to thrive in the post-recessionary environment
Retailers are diversifying their store formats to penetrate new locations
A multichannel approach is helping retailers boost sales densities
Grocers are continuing to develop and extend their value private label lines
Leading players' turnover is being driven by international expansion
Carrefour, Tesco, and Rewe each account for 5.8% of total specialist sales in the EU
Group sales at Auchan and Tesco grew at the fastest rate out of the top 10 retailers in 2010
ACTION POINTS
Target emerging markets, such as China and Brazil, for future expansion
In Europe, focus on expansion in eastern countries
Enter new catchment areas by launching new store formats
Branch out into food-to-go to meet growing customer demand
Consider developing successful instore brands into standalone brands
Offer a click and collect service alongside online delivery
Allow customers to order non-food items from an instore terminal
Introduce complementary services to improve the instore experience
Introduce services that prolong time spent instore
Invest in developing your non-food offer to diversify your product range
In mature markets, diversify into new services
Enhance your private label ranges to encompass both entry-level and premium lines
MARKET CONTEXT AND OUTLOOK
EU grocery expenditure has fallen by 0.5% since 2008
Rising food prices will fuel growth in grocery expenditure
Specialist grocery sales growth is outpacing grocery expenditure
Market consolidation is driving grocery store numbers down across Europe
STRATEGIC ISSUES
New grocery store formats are emerging
Retailers are having to adapt their store formats to enter new catchment areas
Compact hypermarkets help retailers improve sales densities and enter new locations
Grocers are placing greater emphasis on growing their c-store networks over their hypermarket estates
Stores focusing on the food-to-go segment are increasingly being launched by grocery players
The online channel provides a profitable avenue for growth in mature markets
The rising relevance of the internet means that online shopping is set for strong growth
Offering online shopping and delivery has become standard to many large grocery retailers' propositions
Retailers are offering the click and collect model to drive traffic to their sites
Casino Proximity's AlloCLivré offers home delivery to convenience store customers
Instore terminals are being installed to boost sales but maintain sales densities
Instore services and events are helping retailers combat the rise of online shopping
Adding instore services gives customers added reason to enter the store and helps maintain sales growth
Complementary services help retailers emphasize expertise in certain categories
Food services are being added to improver grocers' food quality credentials
Product and brand diversification is helping retailers expand their market shares
Grocers are developing profitable non-food brands to expand in mature markets
Carrefour is placing greater emphasis on its health and beauty ranges
Sainsbury's and Ahold are partnering with existing non-food brands to improve their instore proposition
Tesco is launching standalone F&F-branded stores in Eastern Europe
Grocers' private label lines continue to increase in prominence
Grocers are extending their premium own brand food lines to improve profitability
Value own brand lines remain central to many grocers' product development strategy
COUNTRY FOCUS
Germany's rebounding economy has helped to drive growth in the grocery sector
The success of the hard discounter in Germany is keeping growth in specialist sales low
Sales from the top four grocers account for 65.3% of grocery expenditure in Germany
German consumers' price-consciousness favors the growth of the hard discounters
Food-to-go is a growing store format in Germany
Online is a relatively underdeveloped channel in Germany
France is dominated by hypermarkets, but this format is contributing to low sales growth
Despite high unemployment, growth in grocery spend picked up to 1.5% in 2010 in France
France is an extremely mature grocery market, home to four of Europe's largest players
The hypermarket is the most prominent store format in France in terms of sales
The Loi Raffarin favors the expansion of smaller grocery stores over hypermarkets
The online channel is developing at a fast rate in France
Italy remains the most fragmented grocery market within the top five
Unemployment in Italy is forecasted to rise in 2011, hampering grocery sales growth
Italians' preference to shop at small independent grocers has slowed the consolidation of the market
Hypermarkets are suffering in the Italian grocery market due to poor sales in non-food
Italy's Bersani Law limits the number of large grocery stores in many regions
Grocers' diversification away from food has boosted specialist sales in the UK
In euro terms, the UK grocery market benefitted from one of the highest growth rates in the EU27 region
The UK grocery market is highly concentrated, with the top four players accounting for two thirds of sales
The growing focus on non-food is resulting in larger grocery stores in the UK
Online is a rapidly growing sales channel in the UK, offering a new means to grow market share
Grocers are opening c-stores to capitalize on demand for top-up shopping
Spain continues to suffer from the impact of the recession, benefitting food discounters
A rise in VAT and extremely high unemployment has kept the Spanish grocery market weak
The top four grocery players in Spain account for over a third of total grocery expenditure
Discounters are playing an increasingly larger role in the Spanish grocery market
The Euro 2012 tournament in Poland will help to boost grocery retail sales
Although the Polish economy grew strongly in 2010, unemployment remains high
Many small independent players in Poland are being protected by franchise chains such as Žabka
The discount and convenience store formats are growing at the fastest rates in Poland
Both Tesco and Auchan plan to launch online stores in Poland by the end of 2011
The stability of the Dutch economy ensured continued growth in grocery expenditure
Growth in grocery spend in the Netherlands will mainly be driven by inflation
The Dutch grocery retail sector is led by local player Ahold
Hypermarkets are a rare feature in the Dutch grocery retail landscape
Rising unemployment and wage cuts in Greece are hindering recovery in grocery spend
The Greek economy is continuing to contract, leading to a further decline in grocery spend
The Greek grocery market is led by French retail giant Carrefour
Hard discount players are taking advantage of rising demand for low-price products in Greece
Store openings in Greece can be a slow process, impacting grocers' ability to expand rapidly
Belgium was one of the strongest performing grocery retail markets in the EU27 region
High unemployment in Belgium will keep grocery sales growth subdued
The leading domestic players in Belgium are facing stiff competition from an influx of foreign players
The weak performance of hypermarkets in Belgium has impacted Carrefour's sales
Grocery players in Belgium are attempting to compete on price with the hard discounters
The online channel is underdeveloped in Belgium
Sweden and Finland have shown above average growth rates in grocery sales in 2010
The grocery market in Finland and Sweden is forecasted to grow by double digits between 2010 and 2013
Discounters are growing quickly in both Sweden and Finland
Store numbers are growing at the fastest rate in Finland and Sweden out of the EU27 countries
ICA To Go is one of the first urban convenience formats in Sweden
Grocery spend in Austria rose by 4.1% in 2010, driven by German retailers' expansion
Austria proved to be a very resilient grocery market as low unemployment kept spending on the rise
Austria has become the gateway to Eastern Europe for German grocery retailers
Urban city center locations remain untapped in Austria
Romania's grocery spend fell heavily in 2010 but is expected to rebound quickly
Weak consumer spend and high inflation led to a 6% fall in Romanian grocery spend in 2010
The rapid expansion of foreign grocers in Romania is contributing to a consolidation of the market
Lidl's recent entry into Romania has made owner Schwarz Group the leading player in the country
Smaller grocery stores are becoming more prevalent in Portugal
Sonae has opened a new supermarket format in Portugal
Smaller convenience stores have become the core focus for Sonae and Jerónimo Martins
Low prices and convenience are key sales drivers for grocers in the Czech Republic
Grocers in the Czech Republic are starting to penetrate the online channel
Demand for low-price ranges is growing
Spar has tended to roll out smaller stores over hypermarkets
Although grocery sales grew weakly in Denmark, discounters continued to expand
Danish consumers' propensity to trade down in their grocery shop led to slow grocery sales growth in 2010
The convenience store segment is only just emerging in Denmark
Grocers in Hungary face weak consumer demand and added retail taxes
Grocery expenditure is forecasted to decline in Hungary between 2010 and 2013
The Hungarian government has introduced a retail tax to cut the budget deficit
Lack of consumer confidence in Ireland is benefitting hard discounters in the country
Discounters are reaping the benefits of low consumer expenditure in Ireland
Superquinn has been taken over by Musgrave
Grocers in Ireland are promoting local produce to protect local jobs
New hypermarket and convenience formats are being introduced in Bulgaria
Lidl has recently entered the Bulgarian grocery market
Mercator is rolling out its Roda hypermarket format in Bulgaria
Maxima launched the T-Market Express convenience store format in Bulgaria
Tesco and Billa are extending their brand presence through new formats in Slovakia
Tesco has introduced the Tesco Extra large format store to Slovakia
Rewe has opened a downsized Billa supermarket in Slovakia to fit into high footfall locations
ICA is strengthening its position in the Baltics through lower prices and a loyalty scheme
Retailers are lowering prices and enhancing private label ranges to attract customer spend
Rimi Baltic has launched its Mano Rimi loyalty scheme in the Baltic region
Slovenia's Mercator hopes to widen its reach across the Balkan region
Slovenia's leading grocer Mercator plans to gain dominance in the Balkan region
Grocers are entering Cyprus and Malta to reach tourists familiar with their brands
Lidl has a limited presence in Cyprus and Malta
Holland & Barrett has entered Cyprus
Luxembourg is in a prime location for new grocery players to enter
Ahold could potentially open in Luxembourg following its entry into Belgium
COMPANY COMPARISONS
Carrefour leads the grocery retail market in the EU, followed by Rewe and Tesco
AHOLD
Retailer summary â€" Ahold has a strong base in the US alongside its European operations
Stores â€" Ahold has entered the Belgian market and increased its domestic network
Recent key developments â€" Ahold has launched non-food lines and eco-friendly food ranges
Ahold has entered Belgium
Ahold has launched a "socially responsible" private label brand, AH puur&eerlijk
Albert Heijn has started to stock a comprehensive non-food range
Financials â€" Sales in the Netherlands remain strong and profitability is improving
Outlook â€" Overseas expansion is key to Ahold's growth strategy
Ahold will make further expansion overseas
Ahold will reduce its reliance on the US market and strengthen its position in Europe
ALDI
Retailer summary â€" Aldi stores follow the original hard discount grocery store model
Aldi has expansive store networks in the US and Australia as well as in Europe
Aldi keeps tight control of its operational costs through operating sparsely decorated stores
Aldi predominantly sells own brand goods
Stores â€" Germany continues to dominate Aldi's store portfolio
Recent key developments â€" Aldi Süd is considering further international markets
Aldi's co-founder Theo Albrecht passed away in July 2010
Aldi has withdrawn from Greece
New Zealand is a potential new market for Aldi Süd
Financials â€" International store sales are now outperforming its domestic network
Outlook â€" Aldi's may have to adapt its model to remain competitive
Aldi is no longer able to attract new customers through its lower prices alone
Aldi's overambitious expansion strategy may lead it to exit other markets
Retailer summary â€" Auchan mainly operates large format stores across Europe and Asia
Stores â€" The majority of Auchan's stores are supermarkets situated outside of France
Recent key developments â€" Auchan is diversifying its operations to cater to urban shoppers
Metro has partnered with Auchan to help it develop its private labels in France
Auchan has launched its first Auchan City neighborhood store chain in France
Auchan's Chronodrive has been extended to cater for pedestrians and cyclists
Financials â€" stable food sales have helped to shore up Auchan's flagging hypermarket sales in France
Outlook â€" Auchan is making a greater effort to target consumers seeking convenience
Auchan will have to achieve greater penetration into the convenience market
CARREFOUR
Retailer summary â€" Carrefour is Europe’s largest retailer by turnover
Carrefour is expanding aggressively and is present in 34 countries worldwide
Carrefour operates a multi-format single brand strategy
Carrefour’s Tex clothing label is one of the top clothing brands in France
Carrefour's private label ranges have been ramped up
Stores â€" Smaller store formats are growing rapidly in Europe
Recent key events â€" Carrefour is streamlining both its product range and store banners
Dia has been spun off as a separate business
James McCann, head of French operations, has left the company
The retailer has partnered with Boots to enhance its health and beauty proposition
Carrefour has opened a cash and carry store in India
Carrefour has launched a new hypermarket concept in Europe
Financials â€" Poor European performance is dragging down sales
Outlook â€" Carrefour will diversify its strategy according to region
Hypermarkets will become the growth vehicle in emerging markets
There is greater room for the growth of non-food in emerging markets
The Dia spin-off strategy was a controversial move
E LECLERC
Retailer summary â€" E Leclerc operates across a wide range of sectors alongside grocery
Stores â€" E Leclerc opened its first store in Andorra in late 2010
Recent key developments â€" Lithuania will be the next market entry for E Leclerc
E Leclerc entered Andorra in late 2010
The grocer plans to open a store in Lithuania
E Leclerc's price transparency site has been extended to organic ranges
Financials â€" international sales growth has been driven by store expansion
Outlook â€" E Leclerc's specialist stores and Drive sites are making their mark in France
International expansion has been accelerated and will contribute strongly to growth
E Leclerc is further diversifying its range of non-food specialist stores to improve purchasing power
The Leclerc Drive format will help to boost hypermarket sales
EDEKA
Retailer summary â€" Edeka is the leading grocer in Germany
Stores â€" The Netto hard discount chain has grown by 169% since 2009
Recent key developments â€" Edeka continues to grow through acquisitions
Edeka is aiming to expand its Netto chain to 5,000 stores in Germany
Edeka has acquired 11 Ratio stores in Germany
Financials â€" Independently operated Edeka stores outperformed the Netto network in 2010
Outlook â€" Edeka's Netto chain has become a credible rival to hard discount leader Aldi
Edeka will become a formidable hard discount player through the Netto chain
Edeka should consider entering new markets
ITM ENTERPRISES
Retailer summary â€" ITM Enterprises' grocery stores operate an EDLP proposition in France
Stores â€" ITM Enterprises' stores in Spain are now being bought by hard discounters
Recent key developments â€" ITM is targeting consumers seeking speed and convenience
Intermarché has launched an own brand non-food discount range in partnership with My Fab
Intermarché has launched an iPhone application
Intermarché is rolling out its Express and Netto formats
Financials â€" Intermarché is losing market share in France
Outlook â€" Slow GDP growth in France means that Netto stores will continue to prosper
The Netto discount chain will be core to ITM Enterprises' continued growth in France
REWE
Retailer summary â€" Rewe has a retail presence in 11 European markets
Rewe’s involvement in a variety of sectors has allowed it to expand its presence to 17 European countries
Rewe has differentiated its domestic and international store banners
Rewe is able to increase its buying power through its membership of the Coopernic alliance
Stores â€" A strong acquisition strategy is boosting Rewe's network growth in Germany
Recent key events â€" New formats have been key to attracting new demographics
Rewe has launched a new Rewe to Go store format
Rewe has launched its click and collect Rewe Drive format in Frankfurt
The new Billa Box and Temma formats are gradually being expanded
Financials â€" Sales growth is being driven by aggressive store expansion
Outlook â€" Rewe will maintain growth through format diversification and acquisitions
Rewe's network growth will continue to be driven by the acquisition of small networks
Format diversification plays a large part in Rewe's growth strategy
SCHWARZ GROUP
Retailer summary â€" Schwarz operates from two main fascias
Lidl has a very prolific presence across Europe, while Kaufland has been expanding more tentatively
Stores â€" Lidl continues to enter new markets across Europe
Recent key events â€" Acquisitions across Europe are aiding the group's expansion
Lidl is to acquire Aldi's stores in Greece
Lidl has joined the Kaufland chain in Bulgaria
Kaufland has made several acquisitions of small grocery chains in Germany
Lidl has launched the Biotrend organic private label in Italy
Financials â€" A rise in sales is being fuelled by rising food inflation in Germany
Outlook â€" Discounters will continue to reign but will have to adjust their proposition
Rising inflation in Germany will lead to price hikes
Austerity measures and price inflation will continue to drive customers to hard discounters
TESCO
Retailer summary â€" Tesco leads the UK grocery market
Despite over 60.0% of its sales coming from UK stores, Tesco is the third largest global retailer
There are four core types of Tesco stores around the world
Tesco has diversified its business to include retail services
Stores â€" The UK remains Tesco's largest market but overseas is growing quickly
Recent key events â€" Tesco is making great efforts to improve its green credentials
CEO Sir Terry Leahy has stepped down
Tesco's Vin Plus store in Calais has been closed as alcohol prices have dropped in the UK
Expansion of the online offer has been ramped up
The Tesco Extra format has been introduced to Central Europe
Financials â€" Growth is slowing in the home market but is vital for global expansion
Outlook â€" Tesco is minimizing its dependence on food sales and its domestic market
Tesco is in a prime position to open up in new sales channels
Business diversification is playing an increasingly larger role at Tesco
Maintaining profit growth in the UK is vital for Tesco to be able to fund overseas expansion
APPENDIX
Methodology
Further reading
Ask the analyst
Global Retail FreeView
Verdict consulting
Disclaimer
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