European Food

The future of mainstream brands

As luxury and premium goods become increasingly accessible for consumers, while value brands become increasingly high-quality, the 'mass A' brands in the middle are being squeezed. Therefore the main competition for mass brands is not from other mass brands, but from discount products and private label or premium products. Figure 4.32 Mainstream brands are being squeezed by premium and discount The market has become polarized as many customers migrate primarily toward the value-orientated part...

Case study The Metro Groups future store

The Metro Group has developed a store in Rheinberg, Germany, that the company believes is the future of food retailing. The process began in 2003 and is a collaborative of companies from the retail, consumer goods, service and IT industries, including SAP, Intel, IBM and T-Systems. Metro claims the aim of The Future Store initiative is to make business more efficient by developing innovative ways of bringing retail and manufacturing closer together, while driving innovation in retailing and...

Branded products in store

With discounters increasing in market share across Europe, they are reinventing their brand offer for the market. Many discounters, particularly Dia and Lidl, are decreasing private label share and introducing branded products as part of a strategy to mainstream their product range to attract new customers. Lidl in particular is stepping up its trading relationships with key global branded suppliers. Nestl currently supplies Lidl and Netto and is negotiating with Aldi. Other manufacturers that...

Salt and fat reduction in private label products

Private label health ranges provide a key differentiator in the retailers' offering, both in terms of competition against brands, and also against each other. Healthy products at a low price. One of the key trends is sale and fat reduction. Asda and Tesco are leading the way in a health debate in the UK by getting behind the governments drive to cut the average person's intake of salt to a target of 6g a day by 2010. Tesco overhauled its private label ranges to reduce salt, fat and calories and...

Convenience growth strategies for manufacturers

Develop products for convenience stores Leading brand manufacturers have the R& D expertise and financial capability to develop products specifically for convenience stores, as a means of competing against the growth of private label. The four key trends are Fresh convenience - developing fresh products that can be easily stored, have a longer shelf life and easily consumed On-the-go - reformulating and packaging products that enables consumers to consume while on-the-go Portion controlled -...

Table 26 Discounter presence by country 2004

Belgium Czech Republic France Germany Italy Aldi and Lidl represent one of the biggest threats to mainstream European retailers, as both are expanding rapidly across Europe and are present in more than a dozen countries. Table 2.6 illustrates the market shares of discounters in particular countries in Europe. Germany has the largest discount segment with 40.3 of the market belonging to discounters. Price conscious consumers have contributed to the growth of the segment. Aldi and Lidl visibly...

Diversification into convenience stores

Many leading retailers are diversifying into smaller and convenience store formats because the hypermarket and supermarket have consolidated. The convenience market in Europe is will increase in value between 2005 and 2010 with a CAGR of 3.3 . Italy and the Netherlands will grow the fastest with respective growth rates of 5.0 and 4.9 . Italy's strict planning regulations means that the authorization for medium and large stores is required and rarely granted, while the opening of small shops has...

List of Figures

Figure 1.1 European regions that have experienced the most change in the food and drink retail Figure 1.2 Market shares of the top 5 and top 10 retailers in Europe, ( ), 2004 22 Figure 1.3 Forecast growth, ( ), 2005-2010 vs. market share of the top 5 retailer, ( ), 2004, by Figure 1.4 Regulatory analysis by country 25 Figure 1.5 Maturity and sophistication of the European food retail market by country 34 Figure 2.6 Food retail market segmentation share, by value, 2004 39 Figure 2.7 The fastest...