German Supermarkets Growing Faster than Discounters

Grocery retailers saw sales growth in 2020. Although the number of store visits declined, the average purchase amount increased significantly. German retail institute EHI has found that especially supermarkets in the country have benefited from this phenomenon.

Food discounters increased revenues by an average of 5.6 percent compared to the previous year, while sales of supermarkets grew by 13.1 percent. Among Germany’s discounters, Lidl has the largest market share with 27 percent and sales of 21.6 billion euros in 2020 in about 2,300 stores. Aldi Süd and Nord follow with 2,000 and 2,200 stores generating 16.4 and 12.2 billion euros, respectively. Netto-Marken-Discount achieved sales of 14.6 billion euros through 4,200 stores and Penny 8.1 billion euros with 2,200 stores.
Is Auchan leaving Asia?

According to Bloomberg, Auchan wants to sell its 65 % share of its Taiwan business, which would make it the last step in the company’s exit from Asia. Auchan sold its stake in China’s Sun Art Retail Group to Alibaba Group Holding Ltd. last year. Earlier, it sold its Vietnam business to local retail group Saigon Co.op.

Auchan launched in Taiwan in 1997, it now operates 20 hypermarkets and two convenience stores there with around 5,500 employees. The chain is active in 12 other countries including France, Portugal, Spain, Romania, Ukraine and Russia. It has a consolidated revenue excluding taxes of 32 billion euros from 1,985 points of sale under the Auchan banner.
Russian Mere Advances in Europe

Hard discounter chain Mere is expanding in Europe. The Russian chain, owned by parent company Torgservis, is already in Romania, Belarus, Latvia, Lithuania Ukraine and Poland and has opened its fourth store in Germany. Mere wants to open ten stores in Belgium this year, it has secured its first store locations in Spain and will launch in the UK over the next few weeks. It is said to have plans to enter Italy, Greece and Bulgaria.

Hard discounter chain Mere is expanding in Europe. The Russian chain, owned by parent company Torgservis, is already in Romania, Belarus, Latvia, Lithuania Ukraine and Poland and has opened its fourth store in Germany. Mere wants to open ten stores in Belgium this year, it has secured its first store locations in Spain and will launch in the UK over the next few weeks. It is said to have plans to enter Italy, Greece and Bulgaria.

Mere stores have a very simple and efficient concept with suppliers deliver directly to stores and products sold from pallets in a warehouse type environment. The assortment is limited to around 1,200 SKUs and priced on average 20% cheaper than the market.

With Aldi, Lidl and other discounters having upgraded their stores and enlarged their assortment in the past decade, this no-frills hard discounter may have found a gap in the market. The economic crisis caused by the coronavirus, declining purchasing power and consumer confidence could give the retailer a jump start in Europe and become a serious competitor for Aldi and Lidl.

EU allows dairy descriptive terms for plant-based items

The European Parliament has dropped Amendment 171, a bill which would have censored all use of dairy-related language for plant-based food. Regulations on dairy-free alternatives in the EU are already restrictive. Legislation passed in 2013, means words like “cheese,” or “yoghurt,” can only be used to describe milk-based products which must originate from animals.

This amendment would have gone further and would have prohibited dairy-related packaging formats, such as a carton for plant-based milk, or a block for plant-based butter. In addition, allergen information like “does not contain milk” and descriptive terms like “creamy” or “buttery” would not be allowed.

Plant-based food manufacturers, environmentalists and consumers had heavily criticised the proposed bill. They argue that consumers aren’t confused by descriptions of dairy alternative products and that a more sustainable production and consumption is desirable.

Retailers Trial High-Tech Concept Stores

While many retailers offer self-scanning and self-paying to customers, some are taking technology in shopping one step beyond.

In Germany, Rewe has opened a hybrid supermarket that allows consumers to do grocery shopping without a payment process at the counter. It is called hybrid because customers decide for themselves whether to pay at the counter as usual or shop autonomously without a checkout process. The store is called “Pick & Go” and is located in downtown Cologne.

Customers can use a special app to enter the store. They then do their grocery shopping and at the same time bag their items. At the end, they simply walk out of the store and an invoice will appear in the app.

From the outside, the test store looks like a regular supermarket but inside it is full of technology. There are intelligent cameras and sensors on the shelves and all customer movements are detected by computer vision. Rewe has worked on the project for two years and says that its main focus is to enhance the shopping experience of customers while protecting their privacy.

The technology is now being tested by employees and the store will open up for customers in late summer.

In Portugal, Sonae just opened a 100% cashierless store under the Continente Labs banner in Lisbon. The retailer invested more than 1 million euros in its construction, equipment and technology. It is equipped with about 230 cameras on the ceiling and over 400 shelf sensors which associate the products picked up (and returned) from the shelves with each customer, creating virtual shopping carts, with payment being processed automatically via a connected card.

Customers need to download the Continente Labs application and register with an associated bank card. To enter the store, they open the app and scan the displayed QR code in the turnstile area.

The store has a sales area of 150 square meters and will be manned with six employees to receive goods, restock items and ensure hygiene and safety in the operation.

Both Rewe’s and Continente Lab’s concept stores resemble the Amazon Go stores that offer “Just Walk Out Shopping”. Amazon operates more than twenty Amazon Go stores in four cities in the US and this year launched in the UK with 4 stores branded as Amazon Fresh.


Back to Business with "PLMA’s World of Private Label" in December

News anchor Judith Kolenburg provides details on PLMA's "World of Private Label"International Trade Show to be held in person December 14 and 15, 2021 at the RAI Exhibition Centre. Watch video here.

A Change of Pace for Private Label in China

David Zhang, Managing Director at Buyers Council in Beijing, discusses how private label seems to be entering a new phase of growth in the Chinese retail market. Watch video here.

Pandemic will Trigger Innovation

A new global survey by Accenture has found that changes in people’s lifestyle caused by the pandemic are likely to bring a wave of innovation by retailers and manufacturers.

Retailers have been quick to adapt to new needs and have implemented technology solutions such as AI to enhance online shopping. Manufacturers have shown agility and have shifted production lines to  make hand sanitizers, for example.

95% of the respondents of the survey said they made at least one change to their lifestyle that they expect will be permanent. Working from home, changing travel patterns and a growing desire to shop locally are some of the changes in consumer behaviour that might be long-term.

Ready-to-Eat is Popular in Spain

Spanish retail and manufacturer association Aecoc has found in its latest Shopperview barometer that convenience is a great trend in food consumption. Currently 10% of the population order meals at home to complete their weekly menu, while 60% take their prepared food to work, compared to 37% who did so last June.

The number of consumers of ready to eat has doubled since the beginning of the health crisis, going from 9.1% in April 2020 to 18.2% last February.

A report by Kantar Spain found that 47.5% of those surveyed order food at home regularly. Of these, half place orders at least once a week, and 31% spend more than before the crisis on this type of service.

Changed Shopping Habits

New research from YouGov’s “International FMCG report 2021: Consumer goods in a Crisis” provides an analysis of consumers’ attitudes to fast-moving goods across 17 global markets. The report is based on more than 18,000 interviews and explores how the COVID-19 crisis has affected the FMCG/CPG sector worldwide across a range of categories.

One of the findings is that between 44% and 83% of consumers across all markets agree their shopping habits have changed as a result of the pandemic. With regard to product categories that have gained importance, frozen foods stand out. Three in ten global consumers say they’ve been buying more frozen foods than before the pandemic. Cosmetics have struggled, with a third (32%) of consumers saying they are buying these items less than before. Over half (54%) of consumers intend to buy more sustainable products once the pandemic subsides.
Lidl advances in Digital and Vegan

In the UK, Lidl has launched a new feature in its loyalty scheme app aimed at helping customers avoid crowds and easing shopper numbers throughout the day. The app shows a bar chart indicating how busy the shop is during each trading hour of that day and is updated in real time.

Lidl Poland is equipping its stores with Electronic Shelf Labels. The labels are being tested in one store and will soon be rolled out to all 700 stores.

Lidl uses its loyalty app to provide women in Ireland with free menstrual items every month. In this way, the discounter wants to tackle the issue of "Period Poverty."

In Portugal, Lidl has launched its first exclusive certified vegan wine, Indelével Tinto, from the Alentejo region.

Lidl Germany launched a new umbrella brand: Vemondo. The new own brand will combine around 450 items in the vegetarian and vegan segment.