The Future Of European Food And Drinks Retailing: Implications Of Fast Growth Formats And Private Label For Brand Manufacturers

Published by: Business Insights

Published: Feb. 1, 2006 - 130 Pages

Table of Contents

The Future of European Food and Drinks Retailing

Executive Summary

Market development

Future store formats

Growth of private label

Future private label brands

Conclusions

Chapter 1 Market development

Summary

Introduction

European food retail market value

Consolidation of retailer market share in Europe

Price pressures and regulatory action

France

Germany

Italy

Sweden

UK

Leading foreign players

Leading food retailers

Maturity of the European food retail market

Chapter 2 Future store formats

Summary

Introduction

Food retail market segmentation

Diversification into convenience stores

Regulation and store opening hours

The growth of discounters

Expansion of product offering

Fresh produce

Branded products in store

The impact on private label

Changes in space allocation

Growth of fresh produce in discounters

Increase in non-food in supermarkets

Expansion of online offering

Online users in Europe

Online offering by retailer

Effect on in stores sales

Case study: The Metro Group’s future store

Introduction

The technology

The personal shopping assistant

Electronic pricing labels

Information terminals

Supply chain rationalization

Conclusions

Chapter 3 Growth of private label

Summary

Introduction

Private label development

Belgium

France

Germany

Italy

Netherlands

Spain

UK

Promotion and pricing activities

Chapter 4 Future private label brands

Summary

Introduction

Discount private label

Premium ranges

Private label and ethical retailing

Nutritional labeling

Salt and fat reduction in private label products

Locally sourced products

Key innovators in local products

Fair Trade

The future of mainstream brands

Chapter 5 Conclusions

Summary

Introduction

The future of the European grocery retail market

Leading innovative retailers

Key formats in Europe

Convenience growth strategies for manufacturers

Develop products for convenience stores

Supply discount stores

The private label threat

Ethical retailing

Innovate

Be innovative in product formulation

Develop innovative packaging

Broaden brand portfolio to target more consumers

Upgrade to super-premium

Create value brands to compete with discount private labels

Joint ventures for co-branding

Index

List of Figures

Figure 1.1: European regions that have experienced the most change in the food and drink retail

market in the last 5 years

Figure 1.2: Market shares of the top 5 and top 10 retailers in Europe, (%), 2004

Figure 1.3: Forecast growth, (%), 2005-2010 vs. market share of the top 5 retailer, (%), 2004, by country

Figure 1.4: Regulatory analysis by country

Figure 1.5: Maturity and sophistication of the European food retail market by country

Figure 2.6: Food retail market segmentation: % share, by value, 2004

Figure 2.7: The fastest growing formats in terms of market share across Europe over the next 5 years

Figure 2.8: Discounter presence vs. market consolidation

Figure 2.9: The level of impact on sales of private label products with branded products in hard discounters

Figure 2.10: Internet user growth, %, 2000-2005

Figure 2.11: How will the relationship between online and in store retailing change for multiple

grocers across Europe in the next 5 years?

Figure 2.12: Technology in the Future Store

Figure 2.13: The smart chip

Figure 2.14: Potential benefits of RFID, from supply chain to after sales

Figure 3.15: Private label sectors that will have the biggest impact on brands across Europe in the next 5 years

Figure 3.16: Private label shares by country, (% value), 2004

Figure 3.17: The level of importance for various promotion/pricing activities in food and drink

retailing over the next 5 years

Figure 4.18: Leading European retailer value private labels

Figure 4.19: Factors driving premiumization

Figure 4.20: Leading European retailers premium private labels

Figure 4.21: Warburtons Cranberry Fruit Loaf

Figure 4.22: How important are ethical/ responsible practices to the future success of food and drink retailing?

Figure 4.23: Tesco nutritional labeling

Figure 4.24: Delhaize nutritional labeling

Figure 4.25: Marks & Spencer gourmet additive free crisps

Figure 4.26: Filière Qualité Carrefour

Figure 4.27: Reflets de France

Figure 4.28: EU organic logo

Figure 4.29: Organic private label ranges

Figure 4.30: Fair Trade logo

Figure 4.31: Nestlé Fair Trade coffee

Figure 4.32: Mainstream brands are being squeezed by premium and discount labels

Figure 4.33: Nativa White Tea

Figure 4.34: % of innovative product launches in each category, 2000-2005

Figure 4.35: Wellness Coca-Cola Functional Drink

Figure 4.36: Gira & Gratta Cheese + Rotary Grinder

Figure 4.37: Tyrrells, Kettle Chips and Walker’s Sensations innovative premium snacks

Figure 5.38: Leading examples of products for convenience stores

Figure 5.39: Types of private label products that will experience an increase in sales over the next 5 years

Figure 5.40: Brand manufacturers’ labeling initiatives

Figure 5.41: Ty Nant Still Water

Figure 5.42: Varieties of beer under the Kronenbourg brand

Figure 5.43: Nestlé have a wide portfolio of brands

Figure 5.44: Müller have created joint ventures for added credibility

List of Tables

Table 1.1: Food retail market value by country, $bn, 2005-2010

Table 1.2: Leading foreign players by country, 2004

Table 1.3: Leading grocery retailers, 2005

Table 2.4: Value of convenience store food and drink sales by country, 2005-2010 (US$m)

Table 2.5: European store opening hours

Table 2.6: Discounter presence by country, (%), 2004

Table 2.7: Leading multi-format retailers with discount operations

Table 2.8: UK grocery space data, average (%), 2005

Table 2.9: UK grocery space data, average (%), 2005 (Cont)

Table 2.10: Online offering by retailer

Table 4.11: The value (US$bn) of specialty food and drinks markets, by country, 2005-2010

Table 4.12: Wealth groups in Europe (m) 2000-2005

Table 4.13: Value of the global (Europe and US) organic food and drink markets by key product markets, $bn, 2005-2010

Table 5.14: The leading innovative retailers in food and drinks retailing over the next 5 years

Table 5.15: European regions that will experience the most growth in terms of market share in convenience and discount stores in the next 5 years

Abstract

• Market Polarization. The food and drinks retail market is polarizing. Customers are migrating to the value-led part of the market whilst premium goods are also becoming more accessible for consumers. Both discount and premium private labels benefit from this at the expense of mainstream brands.
• Changes in the Italian market will create growth opportunities.
Strict regulation and a small store culture has previously prevented major multiple retailers from entering the Italian market. Retailers are now recognising that fragmentation impacts mostly on the small stores that cannot compete on price, quality and selection.
• Development of the discounter offering. Discounters offerings are becoming more sophisticated with expanded fresh produce ranges and the introduction of more branded products. This will widen the discounter audience and it is forecast that discounter market share in the UK, Poland and the Czech Republic will increase significantly over the next 5 years.

• Industry executives believe Tesco will be the leading innovative retailer in Europe over the next 5 years with Carrefour and Aldi rated in second and third place. Aldi's rating indicates the changing shape of the European food and drinks retail market as discounters change their proposition to compete more directly with supermarkets.
• In UK supermarkets, the average shelf space of groceries has decreased since 2002. Shelf space in non-food has increased in all but Tesco as retailers diversify their product offering to increase profits in a competitive market place.
• 43.5% of industry executives rated Western Europe the region that will experience the most growth in the convenience sector in terms of market share. Growth is expected to be fastest in the Netherlands (+4.9%) and Italy (+5.0%).

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