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Presented by the Private Label
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INDUSTRY NEWS

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 * Consumer Survey


Judith Kolenburg reports on some remarkable exits and takeovers in physical
retail and discusses major strategic moves. On his side, Joop Elderhorst dives
into the spirits category. Watch video here.

 

 


Supply chain innovation is more important than ever. Ray Gaul, CEO and
co-founder of Retail Cities talks about advancements in multi-source data
integration.
Watch video here.

 

 




PLMA E-SCANNER – SEPTEMBER 2023

September, 2023
In the StoresMarket ResearchPLMA NewsEvents
Lidl returning to no-frills

Lidl is rolling out a new store concept in Germany and Belgium. While the
retailer has been modernising and upgrading its stores for years, it is now
moving in the opposite direction and back to the traditional no frills concept.
Lidl is faced with higher growth rates of competitor Aldi, and changing the
layout of the stores is one measure to compete.

The new layout is not only meant to visually let consumers perceive the retailer
more as a discounter, but it should also make it easier for employees to stock
shelves.

In Belgium, all Lidl stores will be simplified so that they will have the same
layout. Customers are to “recognize” the store and its layout wherever they are.
For employees the new concept should boost efficiency.

Governments intervene to fight high grocery prices

In an attempt to decrease inflation, the Hungarian government has introduced new
economic regulation changes. As of 1 August, grocery retailers are obliged to
offer one product in each of 20 product categories at a discount of at least 15%
for a week.

The measure replaces an earlier rule that forced a discount of 10 percent as of
1 June. Retailers also have to make sure that there are sufficient stocks of the
discounted products. In order to be able to check prices, large retailers have
to publish their current prices in multiple product categories on the Cartel
Office’s website. Consumers can report violations of the rule and there are high
fines of up to € 100.000.

At the same time as the introduction of the mandatory 15% discount regulation,
the government ended the its food price cap policy. The price caps applied to a
wide variety of products such as granulated sugar, wheat flour, sunflower oil,
pork, chicken meat, milk, chicken’s eggs and table potatoes.

The Romanian government has introduced a decree that caps the profit margin for
fruit, vegetables and a dozen other basic fresh produce items. Retailers and
cash and carry operators are not allowed to add more than 20% to the purchase
price.

Meanwhile in France, Economy Minister Bruno le Maire has reached an agreement
with food retailers manufacturers to cut prices on 5,000 products including
pasta, poultry, grains and oil. Competition and fraud prevention agency DGCCRF
will regularly check supermarket prices and there could be sanctions against
companies that do not comply with the rules.

Following the agreement in France, the Belgian Economy Minister Pierre-Yves
Dermagne has asked food manufacturers to lower prices. Since prices for energy
and some raw materials have been falling on the world market, he expects to see
a lowering of prices in supermarkets. The food industry is against a mandatory
price reduction and has urged the government to apply different measures such as
lowering wage costs and not increasing VAT on food.

Auchan builds out in Portugal

Auchan has bought all of the Dia group's activities in Portugal. Auchan
currently has more than 70 stores here and the acquisition means that almost 500
stores will be added to its network. In addition, Dia’s three warehouses are
included in the deal.

Auchan which is historically more concentrated on hypermarkets, has in recent
years been trying to grow in the proximity channel. The deal includes all of
Dia’s convenience stores under the Minipreço and Mais Perto banners. It makes
Auchan in one fell swoop the largest retailer in number of stores, it will
strengthen its omnichannel offer and gives it a presence throughout the country.
All employees will be transferred to Auchan. The business follows Auchan’s prior
acquisition of over 200 supermarkets from Dia in Spain. 

EU Commission revises rules on retail alliances

The new “Horizontal Guidelines”, EU rules on joint retail purchasing, have come
into force on 1 July. They provide the legal framework for retail and wholesale
alliances in Europe. The revised rules show that the Commission assesses
international retail alliances as generally permissible and positive in terms of
consumer welfare.

Christel Delberghe, Director General of EuroCommerce – the association
representing European retailers and wholesalers, commented: “The revised
horizontal guidelines affirm the many benefits that joint buying brings to
consumers and industry, including better prices, choice, efficiencies and
innovation. They also usefully confirm that retail and wholesale alliances may
be set up in various ways and engage in different activities – from joint
sourcing to joint negotiations of terms and conditions – to help retailers and
wholesalers negotiate and bring better prices to households.”

The guidelines also recognise that a key element when assessing the effects of
alliances is the countervailing selling power of suppliers – including whether
they offer “must-have” products that retailers and wholesalers need to place on
their shelves if they want to attract consumers.

The new rules offer helpful guidance on what can and cannot be done when
negotiating with suppliers –reiterating the value of hard bargaining for
consumers. They also confirm the many positive effects such negotiations can
have on consumers, who benefit from better prices and more choice, and for
suppliers, who can expand their distribution networks and innovate more.

In the light of the new guidelines, it comes to no surprise that the Commission
has ended its investigations into the Agecore and Coopernic retail alliances.
The authority sees no signs of an antitrust violation by the international
purchasing cooperations.

With the decision, the Brussels competition authority is clarifying a legal
issue that has long been controversial between retail companies and big
manufacturers. National and European brand associations have always criticized
the so-called "on-top" conditions of the European retail alliances as an
unjustified demand that is not matched by any concrete commercial reward. The
retail side, on the other hand, sees the alliances as an important tool to
negotiate more effectively with suppliers on an equal footing in order to offer
consumers lower prices and more choice.

Casino woes alter French retail landscape

In France, debt-burdened Casino has sold 119 of its stores to competitor
Intermarché. Half of the stores will be rebranded as Intermarché this year and
the other half will follow suit within the next three years. Auchan and Lidl
were also interested in taking over stores from Casino.

Casino has accepted the offer of a creditor consortium led by Daniel Kretinsky
to avert bankruptcy. The agreement says that 1.2 billion euros of new money will
be injected into Casino and its debt of 6.4 billion euros will be restructured.
The consortium will end up with the majority of the Casino shares, between 50.4%
and 53%. The deal means an end to the 30-year power of Casino CEO and major
shareholder Jean-Charles Naouri.

The consortium aims to finalise a binding lock-up agreement this month and
complete all restructuring in the first quarter of 2024.

Back to top

In the Stores 

Tesco is the first retailer to cover the cost of VAT, 20%, on its range of
period pants. The permanent reduction in price is across all eight lines of
Tesco’s own-brand F&F period pants.

Online supermarket Picnic is expanding its range to include drugstore products.
Hundreds of items are added every week. The Picnic drugstore should be up and
running by the end of the year.

Spar Croatia is promoting healthier consumer habits through the ongoing
reduction of excessive sugar levels in its own brand ranges. 160 products have
already undergone successful recipe alterations, resulting in sugar reductions
of up to 80%.

Delhaize is lowering the price of several hundred items under the own brand
'P'tits Lions', bringing the number of discounted products to 1,000.

Netto Marken-Discount customers have a new feature in the app which is a first
for food retailers. If a customer doesn't have a coin to unlock the chain on a
shopping trolley, they can do using the app.

Deliveroo has introduced an app feature that allows customers to top up takeaway
orders with grocery items. Its grocery partners, including Co-op, Sainsbury’s,
Waitrose and Morrisons, will be leveraged to offer the groceries.

Asda launches a new scratch-cooking ingredient range to help more people to cook
from scratch. The Cook by Asda range includes over 40 brand-new products
spanning more than 10 cuisines.

Kaufland presents a new pet food brand called K-Carinura, the products for the
different animal species are colour-coded. A total of 60 products are to be
offered in the coming months. Further product lines are planned for 2024.

Alcampo introduces Zero Waste products under its own brand Cosmia. Products
include washable make-up remover pads and a sponge made from the Konjac plant.

Carrefour is showing the volume of CO2 generated by online orders, a first for a
food retailer. Once a customer validates his online order, he sees the total
number of kilograms of greenhouse gases generated. The aim is to make consumers
aware of the environmental impact of their shopping.

Continente brings a new range of breakfast products and snacks for children to
market. The new range is part of the Continente Equilíbrio private-label brand.
It consists of breakfast cereals, yoghurts, fruit juices and enriched milk.

Aldi Süd starts a customer loyalty program with a new tester club. In return,
the retailer offers consumers prizes and cashbacks. It gives Aldi a chance to
collect feedback as well as strengthen relationships with customers.

Penny Italy has revealed its own brand for aeroponic vegetables. The products
under the "Pianetiamo" label are produced with a special form of vertical
farming, originally developed for space travel.

Migros uses a virtual escape room to lure customers to its stores. In order to
unlock new items in the online game, users need to spend money in the store. Who
manages to escape has a chance to win great prizes.

Back to top

Market Research 
'Sustainability' grows in importance

Research by Circana reveals that sustainability is becoming a greater part of
innovation, with a greater number of manufacturers and consumers alike making it
a priority. The company documented product innovations in six European markets,
UK, Germany, France, Spain, Italy, and the Netherlands. While innovation in
product launches overall decreased significantly - by 16% - since 2021, the
report found that sustainability had in fact been normalised among the public.

When asked what they notice in new products when they hit the shops, 68% of
consumers say that they notice when it’s better for the environment, whereas 61%
notice when it’s better for others. Many consumers also link sustainability with
innovation. 60% believed that innovative companies also were more sustainable.

According to Ananda Roy, senior vice-president at Circana, retailers are the
drivers of sustainability.

Four in ten Dutch use supplements

Nearly 6 million Dutch, fully 41%, used nutritional supplements such as vitamins
and minerals in the past year. They spent a total amount of €1.6 billion, €200
million more than the previous year. This was announced by Multiscope who
compiled data from more than 5,000 people through the Healthy Lifestyle Monitor.

Users of dietary supplements from the study often choose private label. There
are three own brands in the top five most purchased brands of nutritional
supplements. Almost three out of ten users of nutritional supplements opt for
the Kruidvat own brand (29%). Next are Lucovitaal (16%) and Holland & Barrett
(13%). Davitamon (11%) and Etos (4%) round out the top five.

Back to top

PLMA News 
Webinar on creating a private label culture

If you want people in your company to be passionate about private labels, you
need to build a culture that will enable and promote that. How can you build
such a culture? There is a simple enough recipe you can follow, as long as you
include two key ingredients.

Spoiler alert: you cannot change culture simply with training.

PLMA and Fernando Lanzer, author of “Organizational Culture and Climate:
Understanding, Maintaining and Changing”, will organize a one hour-long webinar
about Understanding Your Company’s Culture: The Key to Building Private Label
Passion on 27 September 2023.

For more information or to sign up click here.

PLMA’s Executive Education Programme is open for registration

The private label business can be complicated and challenging. But PLMA can give
you the power and the knowledge you need to be successful at it. PLMA’s
Executive Education programme takes place at the campus of the Nyenrode Business
Universiteit, one of the pioneers in European business education, and the
programme is devoted entirely to private label.

PLMA’s Executive Education Programme will be held 25-26 October 2023 and
includes 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, a retail case study, supply chain logistics and retail trends and
the implications for Private label. Retail speakers include Tore Hoylie, Head of
Innovation and Own brand of Rema 1000 Norway as well as former Sourcing
Vice-President of Walmart Arjan Both. A guided visit to important Dutch
retailers is also part of the programme.

Learn from industry professionals, interact and network with the attendees and
make your private label business future-proof!

For more information or to sign up click here.

Back to top

Events 
27 September 2023

PLMA's Online Lunch & Learn Online Speaker Series

25-26 October 2023

PLMA's Executive Education Programme
Nyenrode Business Universiteit, The Netherlands

12-14 November 2023

PLMA’s U.S. Private Label Trade Show
Chicago

Back to top

E-Scanner is a monthly publication of the Private Label Manufacturers
Association, Strawinskylaan 1873, 1077 XX Amsterdam, The Netherlands.

©2023 PLMA

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