EU Supply Chain Law Moves Towards Adoption

The EU Committee of Permanent Representatives of the Member States voted in favour of the supply chain law. This means the law is one step further in the adoption process. The rules must be voted on in the European Parliament before they come into force.

Now, what is this law about. As reported earlier, the EU has been investigating the possible stopping of goods entering the Union if they were produced using "forced labour." The rules are to provide a framework for communities to sue EU companies for human rights abuses and environmental harm in their supply chains.

A system would be set up in which a list of high-risk areas and sectors would be created. When a company wants to import goods from the list, or produced in areas from the list, the burden to proof that no forced labour was used would fall on the company, not on the authorities.

The process leading up to the approval has meant that many concessions were done. The new agreement now applies to companies with more than 1000 employees, up from 500 and a net turnover of €450m, three times the amount previously agreed. Environmental groups estimate the changes will exclude 70% of the companies the law was meant to cover. 

Top UK Chains Endorse Mandatory Food Waste Reporting

Anti-food waste app Too Good To Go has released an open letter, co-signed by over 30 companies within the food, retail and manufacturing sectors, calling for “reconsideration of mandatory public food waste reporting”.

The letter, signed by the likes of Marks & Spencer, Aldi, Sainsburys, Tesco and Waitrose, was published in partnership with the British Retail Consortium. The letter references progress made in reducing food waste, such as “AI and innovative tools”, “improved staff training and opportunities to identify mutually economically beneficial collaborations”, to “partnerships with surplus food marketplaces”.

Too Good To Go and its signatories go on to say that the action they take as individual businesses “won’t tackle the issue alone”. The companies say that they “need mandatory food waste reporting to help measure and judge if meaningful impact is being achieved, and to encourage more action to be taken across the whole industry”.

The letter warns the cost of not bringing in the measures would far outweigh any costs to the industry of extra reporting.

Is Lidl Changing Its Basics?

Discounters are known for their everyday low-price model. Yes, they do offer weekly promotions. But their permanent range and especially their private label has always been known for the ‘best product for the best price’.

In France, Lidl seems to be moving away from this motto. It has introduced a new range of ‘mini-prix’ products in its stores. The range includes everyday basics in simple packaging for the lowest price, approximately 25% lower than its regular private label. The range is being introduced gradually and the retailers’ objective would be to eventually have some 80 products.

Competition for price leadership seems to be the driver of this development. Lidl and E. Leclerc, market leader in France, have constantly been claiming to be the cheapest on the market. In today’s inflationary environment, Leclerc gained new market share with its low-cost Eco+ range and, in its own words, has dethroned Lidl from being the number one in price positioning on the French podium. Lidl’s introduction of the ‘mini price’ line seems to be a direct response to that.

Retail Industry Needs Skilled Tech Personnel

Technology has long been becoming part of the food retail and manufacturing operations, not only in online activities, but also in logistics, ordering processes and on the store floor. Finding skilled personnel is an ongoing challenge for both manufacturers and retailers now that more and more jobs in the sector require technical insight or knowledge of AI and machine learning. For tech students, the retail or fmcg manufacturing business have not been the most logical or attractive choice after graduation.

As a result, companies have been very creative with incentives to lure talented technology specialists, and to retain them. Lidl, for example, is financially supporting personnel in getting their driver’s license. Children of personnel can also participate in the discount. In the UK, the company is doubling the period of paid maternity and adoption leave from 14 to 28 weeks. In addition, the supermarket will be introducing paid leave for staff undergoing fertility treatment. Edeka tries to win over Gen Z to come work with a creative use of typical “money scam” videos, with which young-dynamic success gurus promise their peers simple tricks in order to quickly gain wealth. The guru in Edeka's videos points out the golden opportunities that lie in an apprenticeship at the retailer.

In addition to special recruitment activities, companies in the fmcg industry have set up in house upskilling programmes for existing personnel to learn them work with new technologies and programmes.

More Franchising Ahead

Retailers are increasingly turning to the franchise model in their store operations. Take Carrefour, from origin operating with own stores, started franchising convenience stores in Brazil last year. In Belgium, the majority of its stores are operated by franchisees and expansion here will equally be done through franchising. In France, it is mainly hypermarkets that are seeing a transfer to franchise.

Alexandre Bompard, CEO of Carrefour, has put the franchise model at the centre of its strategic operations and says that more than 90% of future store openings in Europe will be franchises. The Group will continue to transfer integrated stores to franchise and lease-management in Europe.

Delhaize stirred up the Belgian retail sector last year by announcing that all the stores it owned and operated in Belgium would be franchised. In the meantime, the retailer found buyers for all of the stores and the transfer operation started a few months ago. The goal is that the transformation will be finished by this autumn. Reportedly, the first new openings show encouraging results.

Auchan, historically owner and operator of all of its stores, embarked on a large development project towards franchising supermarkets. The retailer set itself the goal of achieving one thousand franchised stores in France in the long term.

Experts see the move towards franchising as a way to keep prices low and preserve margins. Franchisers can respond more quickly to the needs of their customers, with adjustments to the offer and the addition of local products. Work organisation in the store can be managed more flexibly, improving productivity and service.

TREND ALERT - Store Brand Meal Deals

Retailers are incorporating store brands in “meal deal” promotions. Schnucks, for instance, has promoted $10-and-under meal deals that include a variety of its store brand items. For instance, a deal for Loaded Baked Potatoes includes discounts on Schnucks-brand sour cream, shredded cheese and real bacon pieces. Another deal for Chicken & Romaine Salad includes specials on Schnucks Premium chunk white chicken breast and Food Club fruit and nuts salad toppings.

In another example, Hy-Vee includes a variety of store brands in an Easter dinner meal deal. For $30, shoppers can get a spiral half ham, plus Hy-Vee brand gravy, potatotes, green beans and other items. 

DATA POINTS - Kroger’s Private Label Expansion


The number of new private brand products Kroger plans to introduce this year, Rodney McMullen, Kroger’s chairman and CEO, said in Q4 earnings call.

Lidl Appoints Four Retail Veterans

Lidl US has announced the appointment of four industry veterans to the company’s leadership team.

They are: Miguel Paradela, Executive Vice President of Purchasing and Chief Commercial Officer; Frank Kerr, Chief Customer Officer; Tod Seiling, Vice President of Fresh; and Michael Chao, Head of Marketing.

Kerr is Lidl’s first-ever Chief Customer Officer, responsible for driving a holistic consumer experience. Kerr, who returns for a second stint at Lidl US, where he was one of the first 50 employees, will bring all customer-centric activities together in this newly created team, which will include consumer insights, marketing, loyalty and promotions. Kerr has been in the US grocery industry for over 20 years and has worked at major brands, including Save A Lot and Nestle.

“I am excited to welcome Miguel, Frank, Tod and Michael to the team,” Lidl US CEO Joel Rampoldt said in a statement. “Their combined expertise, incredible leadership and the work of their talented teams will be crucial to our success as we continue to deliver high quality products at low prices for our customers.”

Aldi to Open 800 Stores in the U.S.

Aldi plans to add 800 stores nationwide by the end of 2028 through a combination of new openings and store conversions. Aldi also announced the completion of its acquisition of Southeastern Grocers and its Winn-Dixie and Harveys Supermarket banners, which it said will drive significant growth in the Southeast region over the next few years.

“Our growth is fueled by our customers, and they are asking for more Aldi stores in their neighborhoods nationwide,” Jason Hart, CEO, Aldi, said in a statement. “With up to 40% savings on groceries, new customers are inspired to try us out, and existing customers keep coming back.”

Aldi will invest more than $9 billion over the next five years on its national expansion, adding new locations across the country.

Store Brand 'Beauty' is Booming

Fittingly, store brands are looking better in Beauty. The Beauty Department grew 10.5% in dollar sales in 2023 vs. 2022, according to Tom’s Data Dive by Tom Prendergast, PLMA’s Director of Research Services. The analysis is based on store brand sales numbers in the PLMA/Circana Unify+ data portal.

Eye shadow grew 109.7% in dollar sales and 53.9% in units; Lipstick, up 67.8% in dollar sales, 60.7% in units; and Perfumes & Cologne/Body Powder rose 274.8% in dollar sales and 95.5% in units. Facial Moisturizers grew 56.9% in private label dollar sales and 33.1% in units, while Liquid Body Washes grew 42.8% in dollars and 15.2% in units.