Tuesday, July 10, 2018

Private Label Increases Market Share across Europe

By CPGmatters Staff

Retailer brands keep gaining popularity across Europe. The latest Nielsen data shows that market share for private label increased last year in 12 of 19 countries. It now stands at 30% or more in 17 countries.

Private label reached an all-time high in Europe’s largest retail market, Germany, with its market share there climbing to over 45% for the first time. Market share also increased to its highest levels ever in six other countries: The Netherlands, Belgium, Sweden, Norway, Hungary and Turkey.

“What accounts for this growth is the continued weakness of national brands,” Brian Sharoff, president of the Private Label Manufacturers Association told CPGmatters in an interview in Amsterdam at the recent PLMA International trade show where the association’s coveted Salute to Excellence Awards for wine were announced.

“Look at all of the different companies and countries here at the show,” he said. “Small companies feel they can compete in categories where there are big national brands. It’s partially due to retailers changing who can be on the shelf and knocking out certain companies. Add to that the spectacular growth over the last couple of years of Aldi and Lidl offering 90% private label. They know how to build traffic in their stores. That’s the catalyst in the marketplace.”

Private Label’s gains in Europe have come even in countries where store brands already had very high penetration. Market share for retailer brands climbed in the United Kingdom, Germany, Belgium and Portugal, where share was more than 40%.

In the UK, where supermarkets are investing in their private label programs to meet competition from the discounters, market share climbed to more than 46%.

Private label still accounts for half of the products sold in Spain and Switzerland. Market share in France remained above 30%, but declined as some retailers reduced their price entry brands and moved toward more premium products.

The biggest market share gain was posted in Turkey, where private label climbed by 3 points to nearly 26%. In Greece, retailer brands still account for one of every three products sold in the country.

In Scandinavia, there were gains in Sweden, Norway and Finland, with market share in all three countries above 30%. Private label share also was at 30% or above in four central and eastern European countries—Poland, Hungary, Czech Republic and Slovakia—led by Hungary climbing to 34%. Market share remains above 40% in Austria.

Market share stayed at or above 20% in Italy for the sixth consecutive year, but declined by a point last year. Prospects for retailer brands look to improve as Aldi with its strong private label program enters the country.

Meanwhile, at the trade show in Amsterdam, 28 retailers from 10 countries were named winners of PLMA’s 2018 International “Salute to Excellence Wine Awards.” The awards aim to recognize supermarkets, hypermarkets, discounters and other grocery retailers for quality and value of their private label wines. In all, 58 wine awards were announced in categories covering reds, whites, roses, sparkling, and fortified wines.

The importance of food retailers in wine sales has emerged as trade statistics reveal that more than 50% of wine purchased in the United Kingdom, France, Germany, Spain and Italy is bought at a supermarket, hypermarket or discounter.

Sharoff of PLMA said, “This is resulting in a significant growth of private label wines in all categories as these retailers are well-known for their private label food, snacks, beverages, health and beauty and household products. According to Nielsen, private label sales in these categories is already more than 40%-50%.”

The awards demonstrate that private label wines are succeeding in all price ranges and varieties. “It is not a situation where consumers are shopping for cheap wine. It is clear from the awards that shoppers are looking for quality and good value. That is why the awards reflect both best quality and best value,” Sharoff said.

Analyzing the wine awards by country or format, discounters, such as Aldi and Lidl, won 12 awards, which is a continuation of a trend found at other wine competitions over the past few years. By country, retailers in France won 12 awards, retailers in the UK won 8 awards, retailers in Spain and Portugal won 7 awards, retailers in Italy won 6 awards, retailers in The Netherlands won 5 awards and retailers in the US won 4 awards. The top score in red wines for Best Quality was Albert Heijn’s AH Excellent Selectie Côtes-du-Rhône Villages. The top score for Best Value was Auchan’s Pierre Chanau Cahors Malbec. Among white wines, top score for Best Quality was Central Food Retail in Thailand for its Joy Rhein Riesling. Top score for Best Value was Aldi Süd’s Mario Collina Pinot Grigio Valdadige.

More than 300 wines were submitted or purchased for judging. Panels were composed of approximately 18 wine professionals, Masters of Wines, sommeliers, wine writers, and industry experts. Each panel was led by a Master of Wine.

Hershey Figures Out What Prompts Impulse Purchases in Stores

By Pat Lenius

Everybody knows that impulse sales happen every day in supermarkets. But marketers may not know what makes a consumer to pick up an item that was not on the shopping list.

To find out, The Hershey Company researched the evolution of impulse purchases. The iconic candy maker came up with “eight human truths” that it is using as a platform to help retail partners execute in-store promotions.

Renee Balliet, Senior Manager, Shopper Insights, for Hershey discussed these human truths in a workshop at the Shopper Insights & Retail Activation Conference recently in Chicago. The event was hosted by KNect 365, an Informa company.

Here are the eight human truths and some questions she invited attendees of her workshop to consider:

INDULGE. Shoppers seek permission to “give in” to the guilt. They know they can’t be good all of the time and really don’t want to be. Where can retailers and CPG companies capture consumers inside the store to make them stop and savor?

DELIGHT. Sometimes shopping becomes mundane. There is too much noise. There are no surprises. What can retailers and CPG companies do to make consumers feel a sense of happiness? What can they do to reach and delight online shoppers? New flavors? New packaging? An exciting retail display? “Find something that breaks the rules,” Balliet suggested.

SCORE. Help shoppers feel they are sticking it to the Man and beating the system. Give them a sense that they have won or that they found a great deal. Make it fun to follow an impulse.

RECHARGE. Shopping is a task and it can be hard work. Sometimes the consumer needs a break to boost energy or improve his or her mood. As an example, Balliet suggested selling Cliff bars at the front end.

REMIND. Many consumers write a shopping list before going to the store. But what happens when they forget something on the list or even forget to put something on it? This is where retailers, CPG companies and category managers can come to the rescue, suggesting impulse items. “But when you can’t fall on the safety net of the front end, how can you remind customers about what they forgot?” Balliet asked.

INSPIRE. Savvy merchandisers can make consumers stop short during their shopping trip. They may try to cause customers to stop in front of a product or category that they might not normally visit. How do they do this? By inspiring shoppers with a mental picture of what they could do with this product. “It's about what you want rather than what you need,” Balliet noted. “Amplify that want.”

GESTURE. Even when parents take an authoritarian approach toward their children while shopping, there can be times when they have to sweeten the deal by compromising or finding a distraction. When a parent sees a meltdown about to happen, the primary goal is to prevent a tantrum and the accompanying stress. A retailer who can suggest a smart way for parents to manage a challenging situation with their kids will win their gratitude.

INCENT. Hershey’s consumer research revealed that shoppers appreciate ideas that suggest simple, easy ways to express kindness and caring. They want to feel like a hero to their family and friends. Customers appreciate the opportunity for an impulse purchase that offers a small yet touching way to connect with their loved ones. “We need to come up with different conceptual plans for what happens when the front end goes away,” Balliet said.

Some of this information has been quantified by Hershey. The company’s extensive research included shop-alongs and expert interviews. There are some differences among shoppers, she admitted.

What surprised Balliet from the shopper research was the honesty of their answers. For example, she was impressed by those parents who spoke about needing help dealing with a child’s unruly behavior in a store. It’s not unusual for the child to be soothed with an impulse item from the front end.

Asked about how Hershey prioritizes the eight behaviors or human truths, Balliet said, “As an organization, Hershey looks at this holistically. Priorities might be different with different retailers.” For example, a shopper at Walmart may respond differently than someone at Target or the Dollar Store, she explained.

The Power 20

10 chains with roots in traditional grocery share the list with 10 so-called alternative formats, as the lines between them increasingly blur.

By Meg Major and Jon Springer

Welcome to the unveiling of Winsight Grocery Business’ annual ranking of the nation’s Top 20 Food Retailers, which plots the industry’s most influential companies in the U.S. grocery space. Based on sales data from Kantar Consulting, a foremost global research, insights and information consultancy, the Top 20 list provides a well-composed snapshot of the top food sellers, 10 of whose roots are tied to pureplay grocery, with the balance of others descending from nongrocery lineage, including mass, drug, club, dollar and convenience.

As a composite, the Top 20 contenders, to greater and lesser degrees, have been busy investing in e-commerce, training, talent and infrastructure to reposition their brands for a new era. When detached as a subset, the 10 grocery contenders on the Top 20 leaderboard—Walmart (1), The Kroger Co. (2), Albertsons Cos. (6), Ahold Delhaize (7), Publix (8), Aldi (11), H-E-B (14), Wakefern Food Corp. (15), Meijer (18) and Southeastern Grocers (20)—represent the vanguard of multicapable retailers conveying relevance and value to several shopper groups simultaneously. A key to the endurance of the leading performers of late was an awakening—even before Amazon went whole-hog into the food fray last year when scooping up Whole Foods Market—that new stores are no longer the sole antidote to growing their businesses. In some cases, shedding stores is proving to be an equally important element in the delicate balancing act of capital investments and measured curtailments.

Elley Symmes, senior analyst of grocery retail, sales and shopper practice, Americas, for Kantar Consulting, foresees in the not-too-distant future a reranking of the food chain, courtesy of a trifecta of what was once referred to as “alternate channel players” taking over the leaderboard. “Walgreens, Aldi and Amazon will outpace their grocery retailer counterparts, growing sales above the industry average by a minimum of 200 basis points,” she says.

By 2023, Symmes anticipates Walgreens will surpass Kroger as the second largest grocery seller in the U.S., while Amazon.com is forecast to jump from No. 15 to the seventh largest grocery seller. The net result of this is a complicated competitive retail landscape for the traditional supermarket channel, whose incumbents’ success will be tied closely to their abilities to “look at the whole industry—and not just focus on conventional supermarkets as the primary competitor.” Symmes reiterates the message to allied trading partners working with conventional grocery chains, be it vendors, brokers or financial firms, all of which “must also understand this dynamic to best serve [retail food] customers.”

We take a closer look at the nation’s Top 20 Food Retailers, ranked by estimated annual revenue, on the following pages.

Methodology: The primary sources for the data for WGB’s Top 20 Food Retailers is based on Kantar’s proprietary forecasting tools, which are composed of publicly traded retailers’ annual 10-K reports and other public financial data, retailers’ websites, AggData and Kantar’s ShopperScape database, among others. Kantar formally updates all of its forecasts every six months; data for the Top 20 food retailers list herein is based on its most recent round of updates ending June 1, 2018.

1 Walmart

Top banners: Walmart, Walmart Supercenters, Neighborhood Markets

HQ: Bentonville, Ark. • Store count: 5,295

Walmart’s new sales momentum is all the more impressive when considering that for the first time in the company’s more than 50-year history, it’s gaining share and winning new sales without adding hundreds of new U.S. stores. Rather, it’s getting its existing stores to work harder, particularly in the area of online grocery pickup, now offered in more than 1,400 U.S. locations. The emphasis on convenience has come in addition to price, not instead of it: Recent analyst reports indicate that the big retailer is again widening its advantages over conventional competitors as it zeroes in on the hard-discount threat on one side, and Amazon on the other.

2 The Kroger Co.

Top banners: Kroger, Ralphs, Harris Teeter

HQ: Cincinnati

Store count: 2,779

Perhaps taking some lessons from the one company that precedes it on this list, Kroger is in early innings of a strategic reset as it seeks to regain its sales gallop. The $900 million, three-year Restock plan has so far brought new investment in the meal-kit company Home Chef and an ambitious plan to license e-commerce technologies from innovative British retailer Ocado.

3 Walgreens Boots Alliance

Top banners: Walgreens, Duane Reade, Boots

HQ: Deerfield, Ill. • Store count: 8,100

The pharmacy-led health and well-being enterprise operates one of the largest pharmaceutical wholesale and distribution networks in the world. In addition to its standing as one of the globe’s largest purchasers of prescription drugs, the company’s U.S. division includes 8,100 stores in all 50 states. As it continues to expand its grocery offerings stateside, the chain holds a new title as the first drug chain in the U.S. to offer a line of Chef’d meal kits to 30 of its eponymous and Duane Reade stores in Chicago and New York, respectively, as part of a partnership with Smithfield Foods.

WALGREENS PHOTOGRAPH COURTESY OF WALGREENS

4 CVS

Top banners: CVS, Navarro, Longs Drugs • HQ:Woonsocket, R.I. • Store count: 9,800

CVS officials have been talking about the “retailization of healthcare” for some time, and it’s showing when it comes to food. The drug chain has made healthy foods a major element of its front-of-the-store offering, showcased this spring in a radical store redesign.

5 Costco Wholesale Club

HQ: Issaquah, Wash.

Store count: 520 in 44 U.S. states and Puerto Rico

After turning around its yearlong sales slump in early 2017 and seeing improved fortunes with its e-commerce business—which jumped an impressive 37% during its most recent quarter—warehouse club leader Costco has a new spring in its step. Renowned for its employer-of-choice practices, Costco most recently moved to raise its starting minimum wage to $14 an hour, a $1 increase for entry-level positions.

6 Albertsons Cos.

Top banners: Albertsons, Safeway, Jewel-Osco •HQ: Boise • Store count: 2,200

Albertsons is in the midst of a high-speed reinvention. While zooming toward completion of its Safeway integration, it’s hurtling into a merger with Rite Aid in a move that should provide an immediate pop to sales, shoot the company onto the public markets and, officials say, create a “differentiated retailer.” Albertsons is also at work on technology initiatives ranging from artificial-intelligence-powered loyalty to contactless payments and an “infinite aisle” marketplace as it pushes for $1 billion in digital sales.

7 Ahold Delhaize

Top banners: Giant, Stop & Shop, Food Lion

HQ: Carlisle, Pa.

Store count: 2,000

Observers are anxious to see how Ahold Delhaize, buoyed by central cost savings and set free to pursue local merchandising and branding initiatives, can bring new life to its U.S. brands, such as its pioneering Peapod online unit.

8 Publix

Top banners: Publix, Publix GreenWise

HQ: Lakeland, Fla.

Store count: 1,187

Facing increasing competition in its extended Southeast territory and its home state of Florida, where it remains the dominant grocer, Publix is investing $1.53 billion this year on new stores and remodels alongside upgrades to technology and real estate.

9 Target Corp.

HQ: Minneapolis • Store count: 1,829

Posting traffic growth of 3.7% in its most recent first quarter and driving same-store sales growth of 3%, Target nailed its strongest quarterly performance in more than 10 years. Its digital sales are also tracking strong, increasing 28% in Q1, while it continues to focus its cap-ex spending on upgrading its brick-and-mortar stores. As its Restock campaign commences, Target has launched a new Drive Up service (now available in more than 250 stores); it also has rolled out same-day delivery from more than 700 stores, enabled by its recent acquisition of Shipt.

10 Aldi

HQ: Batavia, Ill.

Store count: 1,600

Deep into an expansion and remodeling campaign that will bring its store count to 2,500 U.S. locations by the end of 2022, Aldi also offers online grocery ordering via Instacart in the Atlanta, Chicago, Dallas and Los Angeles metro markets. The chain’s low-price and private-brand-heavy model has enabled the discount retailer to become one of the fastest-growing chains in the country.

11 Amazon.com

Top banners: Whole Foods Market, Amazon Go

HQ: Seattle

Store count: 470

Its Amazon Go store is pushing the boundaries of technology in a retail setting and its reputation for service and selection in online shopping is the gold standard, but Amazon is only getting started. Its acquisition of Whole Foods a year ago triggered dozens of similar partnerships between virtual and physical retailers and gave the Seattle-based e-retailer a canvas upon which to build a U.S. physical store base—not to mention an attractive demographic of shoppers to capture behind its powerful Prime loyalty program, which is now offerring discounts in the Whole Foods chain and offer fast delivery through Prime Now.

12 Dollar General

HQ: Goodlettsville, Tenn. • Store count: 14,761

To support its ongoing growth, Dollar General is seeking to add 7,000 new jobs to power its fiscal 2018 growth plan, which includes approximately 900 new stores, 1,000 store remodels and 100 replacement stores. The chain is also expanding its digital platform, including its standing as the first dollar-store chain to move into mobile checkout with a new app, DG Go, which allows users to scan and pay for products directly from their phone and bypass the checkout line altogether. The company posted strong net and same-store sales growth in its most recent 2018 first quarter, including a 9% and 2% increase, respectively.

13 H-E-B

Top banners: H-E-B, H-E-B Plus, Central Market

HQ: San Antonio

Store count: 340

The ongoing moves at H-E-B reflect the top priority the largest private employer in Texas is placing on its omnichannel offerings, including its recent appointment of Jag Bath to the newly created position of chief digital officer. The move follows a series of strategic investments in technology and partnerships that H-E-B has forged to enhance its digital offerings, including H-E-B to You Delivery and H-E-B Curbside, which is available in more than 100 locations and is on track to reach 200 locations in 2018.

14 Seven & i Holdings Co. Ltd.

Top banners: 7-Eleven

HQ: Tokyo

Store count: 9,077

With 7-Eleven Inc. approaching 10,000 convenience stores in the United States, its parent company, Japan’s Seven & i Holdings Co. Ltd., is increasingly banking on the North American division for growth as its Japanese business sees sales slow.

15 Rite Aid

HQ: Camp Hill, Pa. • Store count: 2,500

Soon to be united with Albertsons, Rite Aid is set to bring a new edge to health, plus new private brands and a new CEO, to the combined company.

16 Wakefern Food Corp.

Top banners: ShopRite, Price Rite, The Fresh Grocer

HQ: Keasbey, N.J.

Store count: 207

The $15 billion ShopRite coop continues to grow behind entrepreneurial operators offering unsurpassed local market expertise and crowdpleasing prices.

17 Dollar Tree

Top banners: Dollar Tree, Family Dollar

HQ: Chesapeake, Va.

Store count: 14,957

It’s death by a million pinpricks—or, more precisely, by about 15,000—for competitors of Dollar Tree. Its namesake single-pricepoint stores continue to see locations and sales grow at a steady pace in part by tailoring offerings to seasons and occasions that resonate with its bargain-minded shoppers. Performance of its acquired Family Dollar stores has been choppy as it seeks a niche in the discount crowd.

18 Alimentation Couche-Tard

Top banners: Circle K, Kangaroo Express

HQ: Laval, Quebec

Store count: 8,346

The leading convenience retailer in Canada and the largest independent c-store operator by U.S. company-operated stores, Couche-Tard recently completed the integration of CST Brands while rebranding its Corner Stores to the Circle K banner and hiring the company’s first chief marketing officer.

19 Meijer

Top banners: Meijer, Bridge Street Market (summer 2018)

HQ: Grand Rapids, Mich. • Store count: 235

As it prepares to open six small-format stores in urban settings by 2021, including one on the west side of its home turf in Grand Rapids, the supercenter pioneer is also adding six new flagship stores in Michigan, Indiana, Illinois and Wisconsin this year. It’s also streamlining the checkout experience with the addition of Shop & Scan smartphone app-based scanners.

20 Southeastern Grocers

Top banners: Winn-Dixie, Bi-Lo, Harveys

HQ: Jacksonville, Fla. • Store count: 575

A whirlwind trip through Chapter 11 earlier this year restructured heavy debts and gave the parent of Winn-Dixie, Bi-Lo, Harveys and Fresco Y Mas a 100-store haircut, but it has quickly resumed the pace of remodels and is prepping a new chainwide loyalty program.

Why This YouTuber’s Tokyo 7-Eleven Brunch Is Trending

Jul 9, 2018 | 5:49 pm

Jeremy Rose

Editor

The convenience store chain is the definition of ‘big in Japan’

Mike Chen marveling at the tasty buns at a Tokyo 7-Eleven

Screenshot: YouTube/Strictly Dumpling

7-Eleven stores in Japan sell an astounding array of buns.

Convenience chain 7-Eleven might not be at the top of your list of brunch spots, but you probably haven’t been to one in Japan. If you’re imagining a lukewarm hot dog and some tots washed down with a Slurpee, you might have a different impression of the chain after watching Mike Chen of the YouTube series Strictly Dumpling brunch like a champ in Tokyo.

Chen hits the aisles hard in his video, choosing from among a seemingly endless selection of instant ramen and soups and picking up a heap of other treats — dried squid, salmon onigiri, fish cakes, fried chicken, fatty beef, countless buns, a gigantic green tea cookie, a strawberry cream sandwich, and some sort of matchaice cream burrito. (He decides to pass on the corn dog.)

American fans of 7-Eleven might be surprised to find out that the chain is an even bigger deal in some parts of Asia. Tokyo alone is home to over 2,600 stores (New York City, by comparison, has just over 100), and nearly one-third of all 7-Eleven stores worldwide are in Japan. The chain’s Tokyo-based parent company, Seven & I Holdings Co., is the fifth largest retailer on the planet and even operates a major bank called Seven Bank.

With a 7-Eleven on seemingly every street corner in Tokyo, it’s hard to believe there’s room for competitors, but Chen spends the last half of his video feasting at Lawson, another huge chain in Japan that has wildly outgrown its American roots. Chen picks up mochi rolls, more fried chicken (reportedly, Chen says, some of the tastiest fried chicken around), more buns, an egg sandwich apparently recommended by Anthony Bourdain, and some sort of sparkling grape bubble soda.

Clearly, Chen isn’t counting calories, and we applaud him for absolutely maxing it out. Once he’s back stateside, we’d love to see him compare and contrast his Tokyo experience with some of the most calorie-laden foods on 7-Eleven’s U.S. menu.

Food: Value Network Issues