Posted on

Sainsbury’s sales drop a shockwave for market


Big structural changes behind malaise ‘set to descend’ upon the UK’s Big Four grocers, Planet Retail says


The 2.8% fall in sales reported by Sainsbury’s for its second quarter marks a “watershed moment” for both it and the wider UK grocery industry, according to David Gray, retail analyst at Planet Retail. “The sharp decline in like-for-like and total sales at the retailer will send shockwaves across the market. First it was Tesco, then Morrisons, and now even Sainsbury’s is reeling from the effects of seismic structural changes rumbling across the UK food sector,” Gray said.

The shift is akin to long-term climate change rather than the temporary effects of a perfect storm and no one is immune to the effects, he said. “The hard discounters are just one factor driving this change. Shifting shopper habits – consumers shopping little and often at convenience stores, smaller online baskets, households wasting less and evaporating hypermarket impulse spend – are all underpinning this shift. With volumes already dwindling and values expected to hit negative later this year in the face of ever-diminishing price inflation, the situation can only worsen. All this makes it increasingly likely Christmas will be a complete washout for the UK’s major grocers.

“Sainsbury’s is also bruised by the effects of a price skirmish that is progressively heightening in intensity, into which it is fast being drawn through the Brand Match scheme. In the long term, industry-wide margins are likely to come under even more pressure.

“No gaping holes in the company accounts and a slightly less diabolical performance than Tesco are hardly achievements to shout about. Sainsbury’s will need to pull out all the stops over the next few months if it is to escape the worst of the malaise set to descend upon the UK’s Big Four grocers,” Gray said.

Source: Planet Retail press release

Photo: © Copyright Andrew Abbott and licensed for reuse under this Creative Commons Licence

Posted on

How fruit fared in China in 2013


In 2013, China’s fruit exports still focused on apple, citrus and pear. With 35 nations/regions obtaining protocols from AQSIQ (China’s General Administration of Quality Supervision, Inspection and Quarantine), it imported more varieties of fruit. Thanks to zero tariffs between China and ASEAN nations, fruit is imported from Pakistan, New Zealand, Chile, and Peru at very competitive prices. The top 10 imported fruits (in order of import value) were durian, grape, banana, cherry, mango, kiwi, citrus, plum, apple and watermelon. The total value of imported fruit increased 10.6% last year – more evidence that China is an increasingly attractive market.

Apples remain an export market
In 2013, apples were still an export market for China. The total export volume reached 994,664 tons, a 1.9% increase on 2012, with a 7.2% rise in total value to $1.03 billion. The peak months were January, March, April, November and December, with each seeing the export of more than 100,000 tons.
Asia and Europe are still the top two destinations. In terms of trade volume, Thailand, Indonesia and the Philippines are the top three buyers of Chinese apples, while in value, the Philippines topped the list, with more than $20 million, followed closely by Thailand with more than $19 million and Vietnam with more than $11 million. Two other buyers of Chinese apples also stood out: India (with about a 35% increase in volume and 25% increase in value) and Malaysia (30% increase both in volume and value). The Russian Commonwealth remains strong, but buyers have shifted to lower priced apples. Shandong province is the main apple growing region in China, and exported almost half of the total.

China’s apple imports
China imported 38,724 tons of apples value with a value of $67.6 million, down 37% and 26.8% respectively on 2012. In 2013, Chile, NZ and USA apple protocols were temporarily frozen, leaving little choices for importers. Only apples from Argentina, Australia (Tasmania), France, and Japan could be exported to China. At time of writing the bans on New Zealand and Chile had been lifted but the US had yet to regain access. As with apples, apple juice exports exceed imports. In 2012, China exported 750,000 tons of apple juice concentrate, however in 2013 the volume fell 1.7% to 601,000 tons. China imported 1,811 tons of apple juice last year, 75% more than 2012, though the value slipped 20.7% from $1.14 billion to under $0.91 billion. Apple juice from China mainly goes to the US – which bought half the total – and Germany, Japan, the Russian Commonwealth, Chile and Argentina. The average price for exported apple juice last year was $1507.29/ton. 
Citrus: China pays more for imported products
While in terms of volume China exported more citrus than it imported, the good news for suppliers is that exported citrus averaged $1,155/ton, but China paid $1,618.8/ton for imported citrus. At present, Argentina, Australia, Cyprus, Egypt, Israel, Morocco, New Zealand, Pakistan, Peru, Spain, Uruguay, and the US have protocols for export to China. (Though the US protocol was suspended last year, the ban may be lifted in 2014, according to AQSIQ sources.). Year-on-year, China’s citrus imports rose 53.6% last year, to 12,602 tons, while its citrus exports, mainly to other Asian nations, totalled 773,365 tons. The main exporting provinces are Fujian, Guangxi, Shandong, Xinjiang and Yunnan. China’s top citrus buyer, Malaysia, last year took more than 140,000 tons, up 46% on 2012. Malaysia paid $217 million, an increase of more than 72%. Next came Thailand, with more than 62,000 tons (+13%) and $106 million (+50%), followed by Vietnam. Price-wise, Malaysia paid a per ton average of $1588.20, and Thailand $1714.80, while, after a 39.5% increase, Vietnam averaged $685.3. Russia was the top buyer among European continent nations. 

Pears: import price twice that of exports
The top 10 Chinese pear destinations are (in order of value): Indonesia, Vietnam, Malaysia, Thailand, Hong Kong, the US, the Russian Commonwealth, Canada, the Philippines and Singapore. Border trade accounts for about 18% of the total. Shandong and Hebei are the top growing regions.
In 2013, China exported 381,281 tons of pears, down 6.9%. The total value of exports was $361.75 million, up 11.3%. The average price was $948.80 per ton. Though China only imported 3,766 tons of pears (+51.9%), the average price for imported pears was $1,834.80/ton. The total value of pear imports in 2013 was $6.91 million, up 82.3%.Argentina, Belgium, Japan, New Zealand and the US obtained AQSIQ protocols to export pears to China.

Grapes: export price 9% of import price
Grape exporters to China had a great year. In 2013, they sold 205,301 tons (+21.9%) to China, at a value of $55.23 million (+29.8%). Though China exported 141,128 tons of grapes, the average price was only $249.6/ton while it paid $2,690/ton for imported grapes. The export price was thus only 9% of the import price.
Chile and Peru, with the opposite growing season to China, had a great year. At present, besides these two nations, Australia, New Zealand and US (California only) also have grape protocols.


Posted on

Système U attracts customers through proximity and freshness


Système U, France’s 4th-largest general food distributor, is a cooperative that comprises 1559 stores throughout France (including the French overseas departments and territories), a 63,000-strong workforce, a national food headquarters at Rungis and four regional headquarters in the West, South, East and North West. The group’s U mark can be found in two discount chains (Hyper U and Super U) and three chains of neighbourhood stores (Marché U, U Express and Utile). Its 2013 turnover, excluding petrol sales, was €18.45 billion (up by 3,5%), with a market share of 10.3%. Système U Ouest (west), with 491 stores and a 29.5% market share, accounts for 48% of turnover. In 2013, Système U Ouest marketed 207,000 tonnes of fruit and vegetables, up by 22% since 2010, giving it 30% of this market in its region. 

Partnerships with growers
One of Système U’s strong points is its support for French, regional and local products. 80% of the vegetables that Système U Ouest markets are grown in France, and local and regional supplies are encouraged. The company is increasingly committed to partnerships with the growers. All the U brand products, which make up 15-20% by volume of the fruit and vegetables, are grown under contract. Système U undertakes to buy a certain volume and the farmers undertake to comply with certain production criteria, particularly cutting down on pesticide use. At the end of 2012 the group signed a three-year contract with Coopérative BCO – SAS France Allium covering 1200 t/year of onions, accounting for 75% by volume of the onions sold by Système U. To meet the retailer’s requirements, the growers have concentrated on a specific variety with good resistance to mildew, enabling them to cut fungicide use by 30% and eliminate the classic use of an anti-sprouting product. In 2014, two new partnerships are under study for carrots and the white portion of leeks. 
Another major thrust, to accompany the plans for 5% yearly store expansion and the strategy of logistics cost-cutting, sustainable development and defence of the local economy, is to set up short-chain fresh produce warehouses. At the end of 2013 the group opened a new fresh produce depot in the Vendée to serve its stores in the Vendée, Deux-Sèvres, Charente, Charente-Maritime and Vienne departments. Its anticipated throughput is 35,000 tonnes of fruit and vegetables. This is in addition to the group’s three existing fresh produce facilities in the west of France, in the Côte d’Armor, Loire-Atlantique et Indre-et-Loire departments. “Previously we had fewer fresh product warehouses but they were bigger”, said Serge Papin, the Système U chairman, at the opening of the new depot. “From now on our trump cards will be short chains, logistic proximity and buying local products”. To cut warehouse running costs, the group has already started to use robots for order picking and wants to develop this further.

New produce section
In 2013 Système U defined a new produce section concept, more labour-intensive but more attractive, that should be rolled out in 80% of its stores by the end of 2014 and in 100% within two years. It is based on a presentation that consists of placing the products flat on the display units, without any crates or boxes. This means they are laid out just one layer thick and are restocked more often during the day. The lettuces and green vegetables are also kept fresher by misting. To make the produce section more attractive and improve its flow, the weighing scales have been removed. Fruit and vegetables are now weighed at the checkout. An assistant is always on hand in the produce section. The range has been extended to include more organic products, heritage vegetables, exotic fruits and prepacks, among others. Another new departure is the creation of a Fraich Découpe section selling packs of fresh-cut fruit and vegetables. Lastly, the emphasis in 2013/14 is on staff training, both in-store and at a test laboratory to be built in 2014 (when the fresh-cut sections are introduced). 

Posted on

Metro Group lifts global ambitions

RETAIL metro Emmanuel Langdorf

Emmanuel Langdorf, head of fruit and vegetables for Metro AG and Laurent Renard, trading office manager, provide a comprehensive overview of Metro Cash & Carry’s activities

Metro AG, also known as the Metro Group, is a leading international retail and wholesale company. The Düsseldorf- based group’s food activities consist of wholesale trade and hypermarkets. Metro Cash & Carry represents the largest and most international business in the group and is a leading player in self-service wholesale trade, active in 29 countries in Europe, Asia and Africa. 
Metro Cash & Carry’s main clients are hotels, restaurants, catering firms, independent retailers, service providers and public authorities.

City center locations and delivery services
Our sales lines offer customised assortments and services and are excellent value for money. This offer is complemented by innovative solutions as retail concepts and professional services to optimally support professional customers in their respective business.
The Metro Cash & Carry sales concept is flexible and adapts to meet specific evolutions, conditions and needs of the respective countries. The format of our stores varies significantly, with an assortment depth from 2,500 m2 to 16,000 m2. In addition, Metro Cash & Carry has introduced new sales formats to take into account differing customer specifications. For example, the wholesale company in Poland (under the brand Makro) offers a new store format called Makro Punkt. Targeting the needs of small independent retailers, the stores under Makro Punkt primarily offer beverages, tinned foods, dairy products and fruit and vegetables – exactly those products that a kiosk or small grocery store needs. Meanwhile, Odido is a retail-franchise concept initiated by Makro Poland. These stores are run by private owners.  Small traders who choose to enter Odido’s franchise programme have the opportunity to grow their competitiveness in the market. Makro Cash & Carry Poland supports small independent shops with advice and marketing tools. In return, these retailers agree to include a number of Makro’s own branded goods in their stores. In addition, discounts are available if goods are purchased from Makro’s wholesale stores. Shop owners keep their financial and managerial independence throughout the entire process of the programme. Independent traders – particularly those in emerging markets- are important to Metro Cash & Carry. For this group, our sales lines have been tailored towards trader support programmes to help them modernise and make their business completely professional. Together with the customer, specific store parameters are assessed and measures are pinpointed in term of assortment and layout. We also develop special formats for city centre locations. These have already been successfully introduced in Paris, France, in addition to Madrid, Spain and Italy, Rome. These stores have a selling space of up to 3,000 m2 and address the needs of hotels, restaurants and catering firms, offering primarily fresh foods. Thanks to central downtown locations, Metro France can shorten trips made by customers and contribute towards improving the quality and freshness of the fresh produce offered. Another major development within Metro Cash & Carry is the development of the delivery service. This option has become an integral part of the service and is creating value for customers as it saves them time. Professional customers can quickly place their individual orders by e-mail, fax or telephone and the delivery service guarantees that customers consistently receive high quality fresh fruit and vegetables. Our logistics organisation ensures the cold chain is unbroken and that the principles of HACCP, the internationally recognised quality assurance certification, are adhered to.

Strong emphasis on local producers
As an international retailer, we have considerable strengths. These strengths benefit not only our customers but also the community as we believe growth is created in the regional economy and that we play a significant role in improving the quality of life in these areas.
Indeed, our stores and buying organisations in the 29 Metro Cash & Carry countries secure local supply, create and expand supplier relationships. The fruit and vegetable category is a prime example of this. The ‘De ale Nostre’ programme in Metro Romania supports and offers local products to our customers. The local organization has implemented a specific programme with growers, mainly in vegetable sourcing areas in the country, and provides growers technical support and marketing pointers to better serve the needs of Romanian customers.  Metro Cash & Carry emphasises local products: in general up to 70 per cent of our assortment is purchased from local producers and providers. But local does not mean excluding global!

200,000 tons delivered by the International Trading Office
Metro Cash & Carry is more international than any other Metro Group sales group. It operates on three continents and faces different opportunities in each market. A new global sourcing strategy has been created to identify specific customer needs and exploit market potential.  The international trading office concept was created in 2009 to source and procure fruit and vegetables. Located in Valencia, Spain , the newly created organisation aims to support the group in :
• Developing competence and innovative products for customers
• Increasing quality and freshness of products by shortening the length of product marketing
• Creating synergies and meeting Metro Group’s needs on Mediterranean assortment, overseas products and processed fruit and vegetables
• Developing direct sourcing with growers and suppliers in certain areas based on long term and transparent relationships.
The Valencia trading office accounts for 200,000 tonnes of the volume generated in 2013 by the Metro Group. There are regular deliveries to more than 20 countries where Metro operates. Thanks to the collaboration of the group’s buying organisations, this figure is on track to double within 3-5 years. It is a competitive business but the Valencia trading office focuses on nurturing transparent and progressive relationships and initiatives to increase its percentages of sourcing fruit and vegetables. Sourcing activities are focused on Spain, Morocco, Italy, Greece and Turkey for products such as citrus, tomatoes, vegetables and summer fruits. Other core selected countries are used to source  overseas specialties or dry fruit.

Social and ecological objectives too
Sustainability has many facets. A range of activities and cooperative partnerships are needed, as well as the commitment of each individual who can contribute to achieving predefined milestones. Our commitment is not an end in itself. We always consider social and ecological factors alongside our economic objectives. Metro has developed a group- wide sustainability vision. This provides all employees, not just the fresh produce team, with a solid starting point and framework and starting. The Valencia international trading office aims to provide safe, quality products, implementing HACCP but also using other procedures related to the sourcing of products. These include product specification to elicit technical information about product compliance with safety and legislative requirements, and compositional and packaging information. It forms part of the binding agreement between Metro and the fresh produce providers and ensures clarity and transparency in these transactions.  
Efficient procurement structures, bundling volumes and efficient transport in well-organised logistical chains also reduce the amount of energy required during the various stages of the supply chain. 

Posted on

UNIVEG rises to consumer challenges

RETAIL ntw UNIVEG Francis Kint

The solution developed in partnership with the distributors is eating-ripe fruit

“The decline in European fruit and vegetable consumption is a real paradox in view of the consumers’ increasing need for healthier products”, exclaimed Francis Kint, the managing director of UNIVEG Group. This observation is all the more bitter because fresh fruit and vegetables constitute a significantly more sustainable value chain than other food products. “The first thing we have to do is to guarantee a positive eating experience”, he warned. For this reason, UNIVEG has staked a lot on offering its customers pre-ripened “ready to eat” fruit. “We are the largest European fruit and vegetable ripener and can now use this infrastructure to expand our range of ripened products”, he pointed out. UNIVEG ripens nearly 500,000 crates a week of bananas and tropical fruits, approximately 10% of the fruit ripened in Europe according to the group’s estimates. It is the unchallenged leader in Germany and also has its own ripening facilities in Britain, Austria, Spain, France, Italy, the Netherlands and Poland. UNIVEG Katopé UK and Bakker Barendrecht were the first in their respective markets to ripen stone fruit and tropical fruit (largely mangoes and avocados). Each of the group’s subsidiaries has made major technological investments. “Facilities for avocados and mangoes constitute 20% of our total ripening capacity”, explained Francis. On the strength of this achievement, UNIVEG’s eating-ripe tropical fruit clients have more than doubled in 2013, with Germany accounting for 25% to 30% by volume. The group is also increasing its undertakings to farmers and last month announced the renewal of 2000 ha of banana contracts in Suriname following the privatisation of the state-owned farms. The UNIVEG group has around 9000 ha of its own crops, including 3000 ha of apples and pears in Argentina and avocados, apples, pears, grapes and citrus fruit in South Africa “We have sourcing teams in all the main growing countries worldwide. Our latest location is Colombia”.  The group is also pursuing the expansion of its distribution network, particularly in the United Kingdom, where at the end of January it acquired the third-largest pear and apple importer, Empire World Trade, a neighbour of its subsidiary UNIVEG Katopé UK. “We will continue to move forwards in the UK market and achieve our strategic objective of becoming one of the top five British importers”, revealed Francis.

Posted on

Choithrams invests in fresh produce logistics centre

The chain plans two new investments in logistics to support its expansion and improve the quality standards of its fresh items. One fresh cuts division of 20,000 square feet, and another facility of 13,000 square feet for readymade food including fresh juices, will be built in Al Quoz. The fresh cuts unit will cover storage and processing of fresh cut fruits and salads with a capacity of 10 containers of products.
Choithrams stores distribute consumer packs of a variety of greens in specially procured breathable bags that help retain freshness. A variety of freshly cut vegetables, freshly peeled seasonal fruit and easy carry bags of popular fruit and vegetables is also available. “We comply with local customs (Halal) and HACCP guidelines. Regular training for the counter staff is organized through in-house training in order to keep up with the latest industry trends,” said the company’s perishable manager Pravesh Sawlani. Choithrams today runs 30 stores in convenient locations in the UAE, with 24 hour shopping at selected stores, and home delivery services. A further 17 stores are in planning in the region. The group operates under the brand names Mega Mart and Shop Right in Qatar, and in Bahrain under Babasons and Macro Mart. As one of the UAE’s leading supermarket and department store chains, Choithrams is both a favorite place for tourists to shop and a feature of daily life for residents.

Posted on

Al Maya, a winning format with 12 more stores

RETAIL Middle East AL MAYA (4)

Starting from a single supermarket in the UAE in 1982, the Al Maya Group has become one of the the Middle East’s leading supermarket chains. Today it has 33 supermarkets and hypermarkets in the UAE, as well as 5 supermarkets in the Sultanate of Oman. “We continue to expand and plan to open 12 new stores in Dubai, Abu Dhabi and Al Ain this year,” said Kamal Vachani, the chain’s managing director. Current Al Maya shop formats are very diverse, ranging from 3000 to 50,000 square feet. “A new design and concept is being implemented in all our stores,” he said.  Headquartered in the UAE, the Al Maya Group has strengthened its regional presence across Oman, Bahrain, Kuwait and Qatar in the past two decades. The group has also been fortifying its global spread with stores in India and the UK. Its successful strategy has been to maintain high quality standards of fresh food supplies all season and covering 97% of the market, with formats ranging from small grocery stores to large hypermarkets. Fruit is the top-selling category in fresh produce. Apples and pears come first and represent 9.44% of turnover, second are bananas with 8.66%, then exotics with 6.46% and citrus with 6.03%. “We deal direct with most of the leadings suppliers of fresh produce around the globe, in order to provide our valued customers with the best quality.” Taking the apple category as an example, 45% of Royal Galas come from New Zealand, 40% from France, and 15% from Chile, Spain and Brazil. Red Delicious mainly come from the US (60%), France (25%), and Chile and Spain (15%). About 45% of the Granny Smith apples are from France, 15% from Spain, 15% from the US, and the rest from South Africa, Chile and New Zealand. The US supplies 35% of Goldens, France 25%, and Chile, Spain and South Africa the rest. As for pears, we handle D’Anjou (60% from the US and 30% from South Africa), Forelle (60% from South Africa), as well as Packhams from South Africa and Ya Pears from China.  Tomatoes are the top vegetable item, representing 8% of total fresh produce sales. A third of its volumes comes from Jordan, 25% from Oman, 12% from India and 5% each from Egypt, Malaysia and Holland. Potatoes make up 6% of fresh produce sales. About 30% come from Lebanon, 20% from Jordan, 10% from Egypt, and also some from China, India, Pakistan and Bangladesh. “Our organic product sales achieve their margins and are tending to improve, forming about 2% of total fresh produce sales this year.” Local organic farms are developing new growing technologies like hydroponics and making more products available on the market. With the largest distribution centre in the UAE, the Al Maya Group holds the sole GCC rights to distribute a spectacular variety of FMCG products across the region. This ranges from foodstuffs to apparel and luxurious salon treatments. All brands are completely synonymous with the Al Maya Group vision of high quality standards. BS

Posted on

Healthy eating trend in the Gulf


Premium supermarket chains like Spinneys have opened 50% more shops and are investing in new logistics operations

Spinneys’ CEO Jannie Holtzhausen confirms a 15% annual sales increase and the continuous expansion of the chain in the Gulf. Spinneys stores have increased from 40 to 66 units over the last 3 years, with formats of 10,000-40,000 square feet. The chain also includes a few convenience formats between 2,500 and 4,000m2. Its estimated food retail market share in the UAE is between 7 and 8%. 
“Due to our strong focus on fresh produce, our sales of fruit and vegetables have grown 17%, above the average for the other food categories,” Holtzhausen highlighted. The pre-packing of specific categories has helped stimulate sales, particularly for berries, cherries and grapes.  “The growing interest in healthy habits is helping boost fruit and vegetable sales in all consumer categories,” Holtzhausen said. This global trend of increased health consciousness is also seen in the GCC countries, inducing consumers there to buy fresh rather than processed products. When asked about Spinneys’ approach of customer profiling, Holtzhausen said it preferred to focus on stores and categories to improve sales and performance as: “We manage products, not customers”.

“Ready-to-cook” vegetables successful
The chain has successfully developed a full line of pre-cut, “ready-to-cook” vegetables over the last 4 years which now has more than 15 items. Among the popular ones are baby potatoes (microwavable), cut beans, baby cabbage, squash, peppers and mixed vegetables. Each item comes in two sizes: smaller packages for individuals and larger formats for families. The microwavable potatoes product has become the most successful, due to its convenience, and enjoyable taste and firm skin on eating. “Surprisingly, the smaller and baby potatoes outperform the standard potato line in the medium and higher consumer segment,” Holtzhausen pointed out.
“But pre-cut fruits are now our fastest growing range,” he said. Most of the items are made at the farm and sourced from various African countries (Tanzania, Kenya, Senegal and Zimbabwe). Holland remains the main supplier for vegetables though in general its origins have become more diversified. 
Berries continue to enjoy strong sales. Strawberries and blueberries dominate but a full assortment is offered. About two thirds are sourced from North and South America, 25% from Europe (still very seasonal), and some also from Australia and New Zealand. “We believe the most successful suppliers will be Egypt and Peru,” Holtzhausen predicted. Lettuces come mainly from Europe (85% from Spain and Holland), with still only 5% from Africa. “We hope Africa, being closer, will become a major supplier of lettuce as it has a more predictable climate and better political milieu.”

Tasty, Fresh and Healthy
“We have a quite large team of 10 food scientists, looking closely at our suppliers with regular audits at their farms and packing houses, particularly for fresh cuts items.” GlobalGAP protocol is required as much as possible. US and European items are naturally all certified, the other origins are audited by Spinneys’ own quality managers.
Logistics is an essential part of the a total control of the foodchain. Over a third of fruit and vegetables are directly imported and most are stored and handled within Spinneys’ own facilities. The group is now busy constructing a new logistics centre for dry, frozen and chilled products which will be located in Kizard, Abu Dhabi. “Our plan for the next three years is to continue to expand as fast as the economy will allow,” Holtzhausen said.

Posted on

Intermarché wants to become France’s No.1 in fruit and vegetables

intermarche cédric Briais

The retailer’s three-year strategic plan aims to raise its market share from the current 13% to 15%

Intermarché wants to become France’s No.1 supermarket for fruit and vegetables. “In 2013, a consumer survey showed that none of the major French retailers is identified as the leader in fruit and vegetables”, explained Cédric Briais, the chairman of Sca Fruits Légumes Fleurs, Intermarché’s central produce purchasing organisation. “Evidently there is a gap to be filled and Intermarché, which has a store every 17 km throughout France, is in a good position to fill it”. Intermarché has 1813 stores in France (230 in Portugal, 80 in Belgium and 168 in Poland), in four formats (Hyper, Super, Contact, Express), but has lagged somewhat in fruit and vegetables up to now. While the Kantar ranking places it first for fish and second for meat, its market share in fruit and vegetables is only 13.1%. “We have accepted the challenge to increase it and make Intermarché the benchmark French supermarket for fruit and vegetables”, said Cédric Briais. 
A three-year strategic plan has been adopted to achieve a 15% market share at the end of 2015 and 16% at the end of 2017. The concept that has been developed is based on consumer demands. The main emphasis has been on staff training. “We have rewritten our training materials so that everyone has the knowledge to make a real career in produce, so they know the products, varieties and seasons and know how to optimise their freshness”. The decision was also taken to keep someone in the produce section all the time, to underline its traditional appearance. Shelf capacities have been reviewed to adjust them to the most delicate products. Also, the range has been expanded and segmented for greater clarity. For most lines, Intermarché will be offering budget, core, premium and rarer products. Segmentation by use will also be introduced for some products such as potatoes (baking, gratin, frying, firm-fleshed, microwaveable). Two brands have been created to make repeat purchasing easier. Mon Marché Plaisir, launched in January 2014 with an objective of 60 products by June, is intended for core products. “We have revised the specifications and worked hard on the varieties to guarantee the quality standards of these products”, emphasised Cédric Briais. Itinéraire des Saveurs is the brand that identifies local products but was not being used for fruit and vegetables, which it now will be, and also for PDO, PGI and similar products (Rate du Touquet potatoes, Corsican clementines, strawberries from Plougastel, etc.). POS advertising and information efforts will be made to tell consumers about the products, regions and recipes and showcase local products.

Developing partnerships
Another line of work is to develop partnerships with the growers. “Nowadays we need real partnerships to ensure supplies and continuity of quantities and quality, particularly for the products we sell under our own brands”. At the end of 2013, 3 to 5-year contracts were signed with the growers and suppliers of Mon Marché Plaisir products. They are based on undertakings concerning volumes, a certain number of depots to be delivered to every day, and seasonal or market prices depending on the product. Intermarché, which distributes 70% French products, has 6 buying offices at Perpignan, Cavaillon, Agen, Nantes, Arras and Tréville. These six offices supply the 18 depots that provide 80% of the stores’ procurement, while the rest is bought direct. “We make French and regional supplies a priority”, Cédric Briais said. “In lettuces, for example, although the south-east delivers to all the depots in winter, from April to September each depot buys locally”. Imported products are bought from the importers except for bananas, a flagship product for Intermarché that it buys direct. “The majority are grown in partnership with farmers in the West Indies. We buy full container loads, and each depot has its own ripening facility”. In 2013 the 1813 Intermarché stores achieved a turnover of €21.3 billion (up by 3.2%), excluding fuel, and consolidated the group’s 3rd place in the food rankings with a 14.2% market share (0 .3%).

Posted on

SA2PE readies to launch “farm direct” stores

SPAIN fruiters SA2P remplacer (2)

Catalan group SA2PE, focused on fruit and vegetable distribution, plans to add a sixth brand to its stable this year with a new business model centred on farmer-direct produce.

With competition fierce in its traditional line of greengrocers, SA2PE aims to innovate and differentiate with the new line of bigger stores, which in addition to the basic fruit and vegetables will offer dairy products, pre-cooked food, wine from the barrel, and other items. “Like Spain’s colmados (grocery stores) of days gone by.”
CEO Salvador Rodrigo said the new brand – the name of which will not be announced until late April – will complement the group’s chain of Fruit SA2PE fruit and vegetable stores, which spans 85 franchised and 53 group-owned stores around Spain and is expected to enjoy sales growth of ten percent this year. Sales in the Fresh Quality business line, a SA2PE brand focused on the food service (Horeca) segment, are forecast to rise 10-15 percent. SA2PE has been honing its new business model with trials in two stores and will open a third, in the Barcelona suburb of Gracia, in about two months. It handles about 300 different product types each day at its logistics platform at Mercabarna but the Fruit SA2PE stores each offer about an average of 100 varieties, with about a 60-40 split between vegetables and fruit. While they have an average floorspace of 80-120m squared, those in the new line will have a minimum of 120m squared. Apart from drawing on its existing network of suppliers at Mercabarna, SA2PE is working on establishing new suppliers, particularly from Andalusia, for the coming chain centred more on local produce direct from the source.