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The new face of grocery retail in Spain

There has been a boom in proximity retailing and urban stores in Spain, with various Spanish and foreign retailers opening stores on busy shopping streets in city centres, generally with lower amounts of retail selling space. Examples include Condis Express, Carrefour Market and Supercor Expres.

Spain is slowly recovering, but its five years of economic recession have left a lasting impact on its retail sector and consumer behavior. Shoppers are now more price-conscious and retailers have had to adapt to the increasing importance of convenient locations and the incipient threat from low-cost retail formats.Those are among the observations in a new USDA GAIN report on opportunities for US exporters in Spain’s retail food market.

Consumer confidence

The report says Spain is expected to continue to show positive signs of recovery, with a return to pre-crisis retail sales figures likely by 2019. “This situation will likely be reflected in consumers gradually increasing their expenditure again, so opportunities will continue to arise for U.S. exporters,” it says. In the retailing industry, some operators have started to see slow positive growth for the first time in several years, especially in grocery.

Shopping habits

GAIN says that, according to Euromonitor, another effect of the economic crisis is consumers are now reluctant to travel to hypermarkets and big shopping malls on city outskirts, due to the cost and inconvenience. “As a result, the future of many of the large retail centers built during the good days of the Spanish economy are compromised.”

There has thus been a move to proximity retailing and urban stores, with various Spanish and foreign retailers opening stores on busy shopping streets in city centres, generally with lower amounts of retail selling space. Examples include Condis Express, Carrefour Market and Supercor Expres.

Product trends

Spanish consumers are also increasingly health conscious, GAIN says, noting that naturally healthy and free-from products are more widely available in supermarkets and specialty stores. “One of the most interesting and promising categories are healthy products indicated for food intolerances. According to Euromonitor, in 2014, food intolerance products sales grew 27% in value to reach $306 million.

Online sales in Spain

Online retailing is steadily increasing (+7% in value in 2014) and expected to continue to be prosperous in the medium term, as more store-based companies move to online commerce.

Its top internet retailers are focusing on building trust among their collective consumer base. According to Euromonitor, the reasons consumers give for shopping online are:

  • Convenience 78%
  • Better prices and offers 73%
  • To save time 66%
  • Easy purchase process 56%

However, mobile retailing is outperforming internet retailing overall in Spain, where smartphone penetration is estimated at around 80%, one of the highest rates in the EU.

Table 2. Grocery Retailers Company Shares (% Value)

Source: GAIN report SP1542, Spain, Retail Foods Annual 2015

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Carrefour open its first City store in a French airport

Carrefour’s first City convenience store located in a French airport is based in the departures lounge of Paris-Orly’s south terminal. Open 6am–10pm, 7 days a week, it stocks nearly 3,000 items.

Carrefour has opened its first City convenience store located in a French airport.

Based in the departures lounge of Paris-Orly’s south terminal, the new outlet has 200 m² of sales area and stocks nearly 3,000 items.

In a press release, Carrefour Group said the store – open 6am–10pm, 7 days a week – features:

  • a wide selection of organic products, as well as hot and cold snacks and gluten-free products
  • Carrefour brand products – including a special area for Reflets de France regional products – as well as national brand products
  • on-site bread slicing
  • the same prices as those found in town centre City stores

Carrefour said the Orly City store features a wide selection of products to meet customers’ day-to-day shopping needs, as well as what they need to eat on-the-go: grocery products, fruit and vegetables, home maintenance products, ready-to-cook/eat products, snacks, etc. It said the store will also contribute to the airport’s business dynamic and help local employment – 6 employees will be recruited from neighbouring towns.

“By entering into this new partnership and including a leading name that has become synonymous with retail in France, Aéroports de Paris is seeking to provide travellers and visitors – as well as the airport’s employees and partners – with as broad a range of stores as possible. We want to ensure that our airports are accessible to all of our customers,” said Aéroports de Paris CEO Augustin de Romanet.

According to Carrefour CEO Georges Plassat: “This initiative that we have launched with Aéroports de Paris is a shining example of Carrefour’s unique multi-format profile. In many countries, we anticipate our customers’ needs, creating stores that are specifically designed to meet their requirements, selling products and providing services designed to make their lives easier.”


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Carrefour expands convenience format in Shanghai

Carrefour launched its second Easy Carrefour store in Shanghai on June 30. The new proximity format store is located on Chaling North Road, Xuhui District.

Carrefour launched its second Easy Carrefour store in Shanghai on June 30.

The new proximity format store is located on Chaling North Road, Xuhui District.

In a press release, the French retail group said its Easy Carrefour format “is an innovation as well as a breakthrough in profitable mode. In recent years, Carrefour has been trying various ways to open up a larger market, including eCommerce and convenient stores,” it said.

Carrefour’s proximity stores sell takeaway food

Easy Carrefour stores cover up to 280m2, with two levels. The first floor offers fast food, cooked food, dairy products, salads, and semi-cooked food, as well as shampoo and washing powder and some French brands. On the second floor there is an open space with free Wi-Fi  where customers can stay for a rest or to have a meal, Carrefour said.

China expected to be growth leader

On announcing its third quarter results last year, Carrefour said it was continuing its expansion in China despite “a frugal consumption environment.”

Carrefour was the first retailer to open a hypermarket in China – in 1995, in Beijing. It now manages about 240, across 73 cities there.

A hypermarkert opened by Carrefour in China in December

Carrefour CEO Georges Plassat has said Carrefour plans to continue expanding its market share in China, focusing on “newly developing urban areas.” Both China and Brazil “will continue to be growth leaders for the future. Income levels will increase substantially in emerging countries, which should bolster our business over the medium term.”

According to China Daily USA, Carrefour is expected to open 15 new hypermarkets in China this year and roll out more convenience stores.

source: Carrefour

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Understanding the rise of discount and convenience stores

Planet Retail forecasts that over 2014-19, discounter Lidl will see its parent, Germany’s Schwarz Group, log sales growth of 4.8%, well above that of Western Europe’s next biggest retailers – France’s Carrefour (2.6%) and the UK’s Tesco.

Why are the discounters growing so fast in Western Europe? That and other big trends were addressed by Planet Retail’s Bianca Casertano while speaking at the AECOC Fruit and Vegetable Congress in Valencia in June.

The Frankfurt-based retail analyst set the scene by saying that in the next four years, big box stores – such as hypermarkets and superstores – will remain the dominant retail channel. But while their sales growth is slowing (their compound annual growth rate of 1.9% will be mainly due to inflation), that for convenience (5.7%) and discounter stores (4.6%) is another story.

Bianca slide 4 Western Europe Channel Sizes by Sales .png

Planet Retail forecasts that over 2014-19, discounter Lidl will see its parent, Germany’s Schwarz Group, log sales growth of 4.8%, well above that of Western Europe’s next biggest retailers – France’s Carrefour (2.6%) and the UK’s Tesco (3.9%, though the weakness of the Euro makes its CAGR look much stronger than it really is.) The German discounter Aldi is expected to achieve 4.3%.

Over 2009-2019, the big box format store segment will drop from 33% to 28%, losing 5 percentage points of market share, “which is massive.”

The winners will be the discount and convenience stores,” Casertano said.

Western Europe Total Banner Sales of Top 10 Retailers.png

Shwarz Group’s Lidl Poland (source Planet Retail).png

What superstores should do

Demographic changes lie behind the big box decline. There are more older people, one person households, smaller families, and people without cars or without enough money for petrol. More people either don’t want to or don’t need to do a big shop once a week, or perhaps prefer to shop on a daily basis. This is really the problem now for the hypermarket operators, Casertano said.

“Big box won’t be the format of the future, there will be a shift towards discount and convenience stores, to inner city locations – this will be the really, really huge trend.”

To counteract this, big box chains need to become more attractive. An example is France’s Casino group, which now offers bulk buying similar to that usually associated with ‘cash and carry’ operators, and a ‘drive‘ (‘click and collect’) format.

Another way is to focus on food service, such as with restaurants. The bottom line is it has to be a nice experience to go to a hypermarket and too often it’s not, she said.

Casertano also said the big box retailers need to localise store management to ensure their assortment meets local needs. “This will be key in the future.” Metro Group, for example, has recognised this and has completely different formats in the south and north of Italy. It costs more, but in the end pays off, she said.

Screenshot 2015-07-01 at 12.40.28.png

Metro Group: the Metro Cash & Carry store “Casa dell’ HoReCa” in Rome locates fresh and frozen fruit and vegetables within one department to help clients save time. (Source: Planet Retail)

“The flight to convenience”

Meanwhile, Casertano mapped a shift in retail towards small, city-centre locations, something Tesco has adapted to quite successfully with its Tesco Express stores. “There’s also a trend towards franchising, because investments are much lower,” she said, citing Carrefour Express as a good example in Spain.

And she said Migros, Switzerland’s largest retail company, provides a good example of a food service focus in a convenience store with its Bio Take Away outlet, under Zurich’s main train station, which offers only organic products and has a high proportion of fruit and vegetables.

Screenshot 2015-07-01 at 12.17.10.png

Discounters now softer, more sophisticated

Casertano said the discounters are “growing so massively” not because they are opening more stores but because they have evolved, going from a hard, ‘no frills’ discount format to one cleverly taking the best of every channel.

For instance, some now sell multi-packs that copy the bulk buy attraction of the ‘cash and carry’ stores; they offer specialist food ranges, fresh fish and more brands, to be more like supermarkets; and are found in inner city locations and with more food-to-go, like the convenience stores.

Casertano said this convergence is occurring across all retail formats – the lines between hypermarkets, discounters and convenience stores are blurring. Hypermarkets are thus merging more with e-commerce and discounters – Carrefour, for instance, has discount areas in the middle of its outlets. This blending will increasingly be the trend, she said.

Online grocery not so lucrative

Grocery e-commerce is gaining importance and more retailers are rolling out additional services including ‘click and collect’ and home delivery. But it’s not easy to gain an edge in e-commerce because the discounters‘ advantages (cost savings through lower overheads for staff, handling, supply chain, and limited range) mostly apply in-store, not online.

“Lidl, for example, has an online shop, but just because customers expect retailers to. It’s not very profitable. I only know a very few…retailers who’d say their online business is profitable,” Casertano said.

She also stressed the risks of over-generalising and the need to remember that markets vary. For example, drive-through grocery collection works well in France but so far not in Germany.

Use the power of fruit and veg to influence impulse buying

Casertano urged the many retailers at the congress to invest in store refurbishment and make their fruit and vegetable departments more appealing.

“The first thing you see when you enter a store is the fruit and vegetables, and this is key.” People often base their shopping on the produce they buy there, such as choosing a red pepper on promotion because it looks nice and is cheap, and then deciding to buy other products, such as minced meat and rice, to fill it. “And all these articles are based on the fruit and vegetables they bought.”

This impulse buying is a huge advantage offline retail has over online. “You have to make these departments more attractive – this is really, really important,” Casertano said.


TOMORROW: Find out more about what these changes imply for the fresh produce assortment in stores when we publish part two of this article, an interview with Planet Retail’s Bianca Casertano.

See some of our photos from this year’s AECOC Fruit and Vegetable Congress


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US a winner as Taiwan’s export market expands



Last year was a near–record in terms of US farm exports to Taiwan, the USDA reported this week.

It also said demand from Taiwan consumers is pushing up expanding the market for diverse imports, including for fruit, vegetables and tree nuts.

The US is Taiwan’s leading source of farm products overall – supplying about a quarter of Taiwan’s total agricultural imports – and of most varieties of imported fresh fruit. Its respective shares of the import market in what is one of Asia’s big traders includes apples 39%, cherries 50%, peaches and nectarines 76%, table grapes 62%, plums 78%, oranges 81% and berries 79%.

The US also holds a dominant market share for most vegetables, including broccoli 96%, onion 87%, lettuce 99% and potatoes 96%, the USDA said.

Given the island’s relatively small agricultural sector, its dependence on imports is expected to keep increasing, it said.


Also growth in ready-to-eat foods

In 2013, Taiwan’s fresh fruit and vegetable segment grew 80% on 2012 and the 7-Eleven convenience store chain – which sells about 3,000 tons of fresh fruit and vegetables a year – expected fresh fruit and vegetable sales to rise by a tenth last year.

Convenience stores are now major players in Taiwan’s growing market for ready-to-eat foods such as fruit (mainly, bananas, apples and yams) and lunch boxes, the USDA said. 7-Eleven started selling fresh fruit in 2010 and its annual banana sales volume have reached more than 1,000 tons.

Increase expected in indirect imports of fresh fruit by Taiwan’s retailers

Industry sources estimate that about 15% of Taiwan’s imported fresh fruit is now imported directly by supermarkets, hypermarkets, and warehouse stores. The rest is imported by importers/distributors.

“Direct import of fresh fruit by retail stores is expected to continue to increase in the next few years,” the USDA said.

However, it also said sales of imported goods in traditional markets should not be overlooked. Industry sources estimate about 55% of imported fruit from the US is sold in wet markets island–wide.



Taiwan: Commodities Pave Way for Near-record U.S. Ag. Exports to Taiwan

Taiwan: Retail Foods

Both published by the USDA Foreign Agricultural Service’s Global Agricultural INformation Network (GAIN)