current trends in food retailing – small shops · web viewgrocery retailing in selected...

Current trends in food retailing – small shops

Grocery retailing in selected countries from Europe

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Republic of Ireland

Denmark

Netherlands

Belgium

Germany

Poland

France

Portugal

Spain

Italy

Switzerland

Austria

Czech Republic

Slovakia

Hungary

Romania

Greece

Russia

For Turkey see Asia.

Republic of Ireland Back to top

General retail economy

Eire has earned for itself the title of ‘Celtic Tiger’ because of its rapid economic growth through the 1990s and early 2000s. Between 1992 and 1999, Irish retail sales grew at an annual rate of 7.8%, accelerating to nearer 8.6% annual growth for 1999. Total Irish retail sales

£IR 4.5 billion in 1991

£IR 11.4 billion in 1999

The independent grocers held about 50% of the grocery market in 2003, mostly as members of chains like Spar, Mace, Super Valu, and Centra (information from Tony Parker, University College Dublin). Major supermarket companies, especially the companies Tesco, Dunnes Stores, and Superquinn, hold the rest, apart from the 5% share of the discounters Lidl and Aldi

Up till the early 2000s, Irish grocery prices have tended to be higher than the UK for several reasons

i) The existence of the ‘Grocery Order’, preventing price-cutting. This legislation was enacted in 1988, but repealed in 2006, see below.

ii) The lack of economies of scale in the Irish market. Ireland has a population of some 5 million, swollen in the early 2000s by considerable immigration from the eastern European countries which joined the EU in 2004.

iii) The relative isolation of the Irish market, protecting incumbent stores’ profit margins.

Between 1995 and 2000 Irish retail grocery prices rose 25%, but Irish farm gate prices rose just 5%. Irish grocery stores enjoy an average retail margin of 33%, one of the highest in Europe. (OECD working paper, ECO/WKP(2006)19, 9 June 2006, by David Rae, Line Vogt, and Michael Wise)

Retail legislation

Legislation limits grocery superstores to a maximum size of 3,500 square metres in Dublin and 3,000 square metres elsewhere. However non-food warehouse retailers like B & Q can have stores up to 6,000 square metres; IKEA, considering expanding into Ireland, is pressing the Dublin government to raise that limit. In 2006 Eire abolished the ‘Grocery Order’; like Resale Price Maintenance in the UK, this had banned discount selling of groceries. The Grocery Order set up in 1988, protected smaller retailers from being undercut by larger supermarkets with superior economies of scale by allowing grocery suppliers to fix a minimum price at which retailers could sell their goods. The Irish Competition Authority estimated that the Grocery Order was costing the average Irish household some 480 Euros per annum (2004), by preventing larger supermarkets from selling foods at ‘below [wholesale] cost’. In 2007 Germany made the opposite move, prohibiting below-cost sales of food by large retailers.

Sunday opening is legal in Ireland but many stores operate limited hours.

Independent retailers

The number of independent grocers in the Republic of Ireland fell from 16,000 to 6,000 from the mid 1960s to 1990.

Retail multiples

Aldi

1999, Aldi entered Ireland, opening stores Dublin and Cork.

9/2004, Aldi had 66 stores in Eire.

2008, Aldi announced major expansion plans in Ireland. 17 new stores are to open over the next year, and another 18 the subsequent year. Before this expansion, Aldi had 61 stores in Ireland, end 2008.

Lidl

1999 Lidl entered Eire

Musgrave

Sales to 12/2004, up 13% to Euro 68.5 million. Pre tax profit up 16% to Euro 3.8 million.

Superquinn

Eire supermarket, head office at Lucan, Dublin.

1960, Feargal Quinn opened his first store in Dundalk, in November.

1973, Superquinn began operating in-store bakeries.

2/2006, 21 stores and 8.5% of the Eire grocery market.

Tesco

1997, Tesco entered Ireland. It bought Power Supermarkets Ltd from Associated British Foods, who operated stores under the Crazy Prices (discount format) and Quinnsworth fascias; Powers was the largest supermarket chain in Ireland. Tesco Ireland was then created. Since 2000 Tesco has aggressively reduced prices on its own-label goods, counteracting a generally high level of prices in Eire for groceries.

Tesco, 2005, 91 stores in Eire.

Tesco market share in Eire 10/2007 was 26.1%.

Tesco market share in Eire 4/2009 was 25.7%

Tesco market share in Eire 4/2010 was 26.8%

Tesco market share in Eire 4/2011 was 27.3%, 130 stores.

Denmark Back to top

Retail legislation

Denmark has prohibited superstores from being larger than 3,000 square metres, resulting in Copenhagen having an even spread of smaller grocery stores (‘Convenience Store’, 18/7/2003, p.57). Sunday trading restricted.

Retail multiples

Aldi

1989, Aldi had 50 stores in Denmark

Fakta

2009, Fakta had 360 stores in Denmark

Lidl

2009, Lidl had 60 stores in Denmark

Netto

Netto is part of the Dansk Group, itself part of the Maersk Group, which also runs Maersk Shipping. Therefore Netto is able to import foods to its UK supermarkets at reduced rates.

1960 Dansk Supermarkets (owner of Netto) founded.

4/1981 Netto opened its first store, in Copenhagen

2001 Netto has 280 stores in Denmark. The parent group Dansk also owns two of Denmark’s largest grocery chains, Bilka and Fotex.

2009, Netto had 400 stores in Denmark

Foreign portfolio

UK – entered 12/1990 (Leeds); 1995=50 stores; 2002=130 stores (130th at Pendlebury, Manchester); 2004=134 stores; 2006=145 stores.

2010, Asda (subsidiary of Wal-Mart) announced plans to buy Netto’s UK stores.

Sweden – entered 5/2002; 2005=59 stores

Germany – entered 9/1990

Poland – entered 8/1995

Netherlands Back to top

Retail legislation

.Planners aim to have supermarkets located at public transport junctions (from 1990), but this rule partially relaxed after 1996.

Retail multiples

Ahold

Supermarket format = Albert Heijn

1887 The first Albert Heijn local grocery store opened in The Netherlands.

1998, Turnover was US$ 24.1 billion

2004, Turnover was Euros 44.5 billion. Gross profit was Euros 9.212 billion

2005, Turnover was Euros 44.5 billion. Gross profit was Euros 9.206 billion

2006, Turnover was Euros 44.9 billion

1988 Ahold bought Finmast (formerly US-owned company)

3/2004 Ahold exited from Asia

12/2004 Ahold sold its Spanish stores

2005, Ahold exited from the USA

Aldi

1989, Aldi had 200+ stores, trading under the Combi fascia

Belgium Back to top


2008, Discounters have a 13% market share.

Retail legislation

1994 Royal Decree permission required for any new supermarket over 1,500 square metres in densely populated areas, or over 600 square metres elsewhere.

Retail multiples

Aldi

1988, Aldi had 150 stores in Belgium

Carrefour

1999, Carrefour had 483 stores in Belgium. It then also had a 27.5% stake in GB, a Belgian grocery retailer, as a result of Carrefour’s purchase of Promodes.

(GB or Grand Bazaar was founded in 1958)

In 2000 Carrefour boiught the remaininng 72.5% of GB. This brought the Nopri and Unic chains into Carrefour ownership. In 2001 Nopri and Unic were rebranded as Carrefour; the GB logo was retained on Carrefour’s Belgian stores, as there was strong consumer loyalty to the GB brand.

Colruyt

The Belgian discount chain Colruyt is gaining market share at the expense of Carrefour and other large chains as the credit crunch hits consumer spending power (Economist, 16 August 2008, p.59).

Delhaize


2005, Turnover was Euro 18.3 billion

2006, Turnover was Euro 19.2 billion

2008, bought Plus Hellas in Greece

2008, bought La Fourmi, 14 stores, in Romania.

Germany Back to top


Shop opening hours are more restricted than in most other European countries. German retailers were not allowed to open after 6.30pm on weekdays, and could only open on one Saturday a month, until 2.00pm. In 1996 these restrictions were partially eased to allow a further 10 hours a week opening, e.g. on all Saturdays until 4pm. This of course applies to large and small shops. Sunday opening is still (2008) rare. By contrast in the UK supermarkets can open all day Saturday and for up to six hours on Sunday. Hence in Germany there are less economies of scale open to the supermarkets. The German retail market is dominated by indigenous discount stores.

2008, discounters had a 29% market share – the 2nd largest share in Europe, exceeded only by Norway’s 30%. (The Grocer, 28/6/2008, p.4, sated that ‘In Germany, discounters occupy more than 40% of the market’).

Germany is not an easy environment for large multinational retailers. Retail labour costs are high and this has deterred retail investment. German shoppers find themselves faced, frequently, with a choice of discount stores offering a rather basic shopping environment. Retail volume growth rates in Germany are also rather low.

During the 1990s there was reduced economic growth in Germany due to the costs of reunification. The German economy also suffered from the changeover from the Deutschemark to the Euro, and since 2007 has endured the effects of the global Credit Crunch.

Retail legislation

Planners generally allow supermarkets in designated industrial areas (Retail Strategy, p.82), if under 1,200 square metres. This limit was reduced to 800 square metres in 1995 across most of Germany. Hence many small towns in Germany have their main supermarket, usually a discounter such as Aldi or Lidl, not in the populated area but a few hundred metres away in an industrial estate.

Opening hours were strict; closing was enforced at 6.30 pm Monday to Friday and at lunch time on Saturdays, none on Sunday. From 1996 hours were extended to 8pm on weekdays and 6pm on Saturdays.

In 2007 the German Government approved a law to protect smaller retailers by prohibiting retailers from selling foods below the wholesale price they paid for them. In other words, Germany has just gone exactly the opposite way to the Republic of Ireland, which in 2006 rescinded its Grocery Order, forbidding large retailers from selling below cost price (source, Eurofood, 2/5/07, p.22). German retailers will still be able to cut the prices of seasonal or near-sell-by-date foods.


The number of grocery stores in Germany fell from 160,000 in 1971 to 80,000 in 1984, even as total sales space rose 50% over this period. There is even a German word – ‘Greisslersterben’ – meaning ‘death of the grocer’, to describe the decline of their independent shops.

Retail multiples

Aldi

Year – reporting date

December

Profits (pre tax)

Sales

Million Euro

Million Euro *

1954/5

15

1974/5

3,000

1984/5

8,500

1985/6

1986/7

1991/2

6

1992/3

11

1993/4

12.1

1994/5

13.3

14,800

1995/6

14.8

1996/7

17.4

1999/2000

19,000

2001/2

25,000

2003/4

26,100

2006/7

27,000

2007/8

43,000

*Figures converted into Euro at 2000 rates –estimates only

Year

Store numbers - Germany

Store numbers - worldwide

1955

100

1974

1,000

1988

2,000

1995

3,000

2000

3,350

2003

5,000

2007

7,500

Aldi - history

In 1946 the Albrecht family’s small grocery store in the industrial town of Essen was taken over by the two sons, Theo and Karl. By 1950, they had opened a further 12 stores, focussing on low prices, and limited range (Gerhard, 2005). By the 1960s they had around 350 stores. They divided the business into two in the 1960s after a dispute over cigarette sales; Aldi Nord, run by Theo (headquarters, Essen), and Aldi Sud, run by Karl. Karl had been reluctant to stock tobacco products as he believed it would attract shoplifters. The Aldi fascia first appeared in 1962 in Dortmund, a contraction of Albrecht and discount. The UK stores come under Aldi Sud.

1988, Aldi had 2,000 of the 6,000 discount stores in Germany.

2002, market share, Germany, was 7.8%

Wal Mart

1997, Wal Mart entered Germany, buying 21 Werkauf supermarkets. In 1998 Wal-Mart bought 74 Interspar stores in Germany. Wal-Mart encountered problems with its expansion in Germany caused by that country’s strict planning laws and shortage of suitable sites for new stores. These factors reduced the economy of scale Wal-Mart could obtain in Germany. Competitors to Wal-Mart, chiefly discount chains such as Aldi and Lidl, operated on low margins and could match Wal-Mart’s prices, and it is illegal to sell groceries below buying cost in Germany. Cultural factors also ate into Wal-Mart’s performance; Germans generally have much smaller fridges and less storage room in their homes than do Americans. Wal-Mart also tried to apply strict US standards of management to its German workforce, and met with resistance and loss of employee morale. By 2000 Wal-Mart had only achieved a market share of 2.0% in Germany.

Lidl


2004, Turnover was Euros 9.7 billion

2007/8, Turnover was Euros 35 billion

1930s, Lidl and Schwarz Grocery Wholesale founded in Germany (owned by the Schwartz family).

1973 First Lidl store opened, in Germany.

1974, Lidl had 10 stores in Germany

2000, Lidl had 2,000 stores in Germany

5/9/2006. Lidl is to experiment with selling cut-price flights (with Air Berlin) at its UK checkouts. Lidl claimed there would be a natural match between cut-price grocery shopping and cheap flights; other rival airlines said air travellers would tend to look for good flight deals on the Internet, not at a supermarket.

Foreign portfolio

UK – entered 1994 (40 stores)

Ireland

Norway – entered 2004; EXITED 3/2008

Finland – entered 2002

Spain

Metro

Metro was established in 1964. It owns the Real fascia. It owns the former Wal-Mart stores, bought when Wal-Mart exited Germany in 2006. Metro entered China in 2011 and planned to have 100 stores there by 2016 – however Metro was forced to pull out of China because of cheaper and better ranges available online.

1997/8, Sales were US$ 34.5 billion

2001/2, sales were Euro 32,022 million; market share was 9.7%

2002/3, sales were Euro 53,561 million

2003/4, Sales were Euro 56,400 million

2009/10, Sales were US$ 89,100 million

Rewe

Owned by Toon.


2001/2, group sales rose 8.4% to Euros 37.5 bn. Growth in Germany was just 3%, due to poor economic conditions, giving 2001/2 sales of Euro 22.86 bn. Growth outside Germany was 25% up on the year, giving sales of Euro 7.65 bn.

2002, Rewe is to close 150 of its 7,300 stores. This comes on top of closures of 300 stores in Germany in 2001. Market share 2002 was 8.9%

2006, market share was 13.2%

2011/12, Sales were Euro 66.38 bn (groceries Euro 50.05 bn); Rewe had 15,700 stores in Germany and 12 other countries.

Wal-Mart

12/1997, Wal-Mart entered Germany, buying an upmarket chain, Wertkauf, in 1997 (21 supermarkets).

31/12/1998 Wal-Mart bought Inter-spar (owned by Spar-Handel AG), with a further 74 outlets. See 2006 for reasons for exit from Germany.

1999, Wal-Mart had 95 stores in Germany

2005/6, Wal-Mart made losses of £360 million (Euro 528 million) on sales of £1,750 million (Euro 2,560 million) in Germany, in 85 supermarkets. It had a 1.5% market share in Germany in 2006.

7/2006 Wal Mart announced it would exit from Germany. Its 85 stores were sold to Metro, trading under the Real fascia. This cost the company US$863 million. Wal-Mart had suffered nine consecutive years of losses on its German operation, of 85 hypermarkets. The company was not used to having major chains such as Aldi and Lidl undercut its position as cheapest retailer, and it misunderstood the German consumer culture. For example it had greeters at al its stores to smile at all visitors. This antagonised German shoppers who like to look for bargains unmolested by shop assistants.

The restrictive nature of German shop opening hours (Ladenschlussgesetz = law on shop trading hours), with almost no Sunday trading, thwarted efforts to gain economies of scale. Worse, Wal-Mart never came close to gaining a significant market share of the German retail grocery market, with just 85 stores in the country.

It also appointed a head of the German operation who spoke no German, and insisted that his managers also conducted business in English. This head was then replaced by another who tried to run the operation from England (Economist, 5/8/2006, p.54). Contrary to what many linguistically-lazy English speakers think, not everyone in Germany can speak English.

Poland Back to top


Poland presents an especially attractive market to western European supermarket chains seeking to enter the territory laid open by the collapse of the Soviet Union at the start of the1990s. Poland was one of the wealthier per-capita Warsaw Bloc countries and also the largest, giving a potentially prosperous market with good economies of scale. Poland also has a more youthful population profile than do countries in western Europe, which promises an expanding grocery market, unlike the static food market in western Europe.

The Austrian chain Billa (owned by the German retailer Rewe) set up the first supermarket in Poland, in Warsaw in 1990. By 2001, large-format stores (hypermarkets, malls, and discounters) accounted for 11% of Polish retail sales and 25% of Polish food sales.

By September 2004 Poland hosted 198 hypermarkets run by eight different western European companies. Tesco entered Poland in 2005. Germany’s Metro AG chain is strong in Polish retailing generally, especially in DIY and electronics. Also of German origin is Kaufland, a subsidiary of the Lidl and Schwarz Company. Kaufland entered Poland only in 2002 and by 2004 had 25 stores there. Kaufland operates discount stores, with low prices but a limited range.

Tesco is fighting for market share (2009) against discounters such as Biedronka, (a Portuguese-owned discounter, with a 13% market share), and Martins, with its 6% market share matching that of Tesco.

Retail legislation

As small Polish shops are threatened by an influx of foreign supermarkets, Poland has enacted its own version of the French Royer law (Economist, 19 May 2001, p.89). Local authorities can veto new shopping centres, there are restrictions on new supermarket developments of over 2,000 square metres, and the Polish government is being urged to stop ‘predatory pricing’, supermarket prices deliberately set low so as to force local small shops out of business. However many superstore operator saw this veto coming and got planning permission for new store sites before it was implemented.


Poland suffered an economic recession between 2000 and 2003, which made shoppers more careful with their money and boosted the share of any supermarket able to undercut the prices of Poland’s estimated (2004) 100,000 independent ‘corner’ grocers, shops with under 100 square metres sales space. However Poland’s small independent shopkeepers are starting to set up buying groups akin to Spar or Londis in the UK.

There were still some 150,000 independent small shops in Poland in 2010, a third of these family-owned. In 2010 independent shops had 40% of the Polish grocery market, almost equal to the 42% held by supermarkets and discount chains. In 2010 around 25% of Poles still shopped at local stores every day for their groceries.

Retail multiples

Aldi

2007, Aldi postponed plans to enter Poland, due to difficulties in finding suitable premises. Aldi has also cut back plans for Poland, from 20-30 stores down to 10, mainly in Silesia. Aldi will be competing with Lidl (market share 17%) and Plus (market share 13%), the second and third largest retailers in Poland (Eurofood, p.19, 19/9/2007), also Biedronka.

2009, Aldi has 20 stores in Poland

Biedronka

2009, Biedronka had 1,120 stores in Poland

2010, Biedronka had 1,541 shops in Poland

2011, Biedronka was market leader with a share of 12.9% (Tesco was 2nd)

Carrefour

1999, Carrefour had 16 stores in Poland

Leclerc

2009, Leclerc has 20 stores in Poland. The French group, in addition, has bought the German retailer Rewe’s stores, 25 stores, which were trading under the Billa fascia.

Lidl

2010, Lidl had 248 shops in Poland

Netto

2010, Netto had 203 shops in Poland

Rewe

2009, The German group Rewe, whioch entered Poland in 1996, is to concentrate on the cash and carry trade, which is operated under the Selgros fascia

Tesco

1995, Tesco entered Poland.

2000, Tesco had 10 hypermarkets and 40 supermarkets in total, trading as Savia.

2002, Tesco bought the 13-strong chain of Hit supermarkets in Poland.

2005/6, Tesco sales were £917 million; profits were £46 million.

2006, Tesco had a 4% grocery market share in Poland, and operated 107 stores there.

2009 Tesco had 301 stores in Poland, with 24,870 staff, and a 6% market share.

2011, Tesco had 371 stores in Poland, a 6.5% market share (2nd behind Biedronka), and sales were £2,100 million.

France Back to top


French supermarkets

French hypermarkets (over 2,500 square meters sales space) had 3.6% of the grocery market in 1970, and 33.0% in 1997.

French supermarkets (sales space 400 – 2,500 square metres) had 9.0% of the grocery market in 1970, and 28.3% in 1997.

French small shops had 66.7% of the grocery market in 1970 and 37.2% in 1997.

(source, Buyer Power and Competition in European Retailing”, p.101).

Market share 2010; Carrefour 21%, LeClerc 11%, Auchan 10%, Casino 8%, Systeme U 8.0%, others 30%

France had 725 hypermarkets in 1988, 950 hypermarkets in 1992, and 1,060 hypermarkets in 1996.

French grocery market size, 2011, Euro 171 billion

As the credit crunch bites, shoppers seeking economies are turning to discounter chains. In the 2nd quarter of 2008, discounters (e.g. Aldi, Lidl, Netto) accounted for 11.25 of the French grocery market, up from 10.5% a year earlier (Economist, 16/8/2008, p.59). Meanwhile the large supermarket chain Carrefour lost market share.

Retail legislation

The Royer Law, enacted 1973, now updated by the Raffarin Law. The Royer Law made permits compulsory for supermarkets of over 1,500 square metres in communes of population over 4,000, or of over 1,000 square metres in smaller communes. Under the Raffarin Law, local authorities can veto a new supermarket of over 1,000 square metres selling area. The Royer law had restricted supermarket development over 1,000 square metres or over 1,500 square metres in communes of population over 40,000.


French consumers may finally be succumbing to the advancing tide of fast food outlets and convenience food that has been as bad for the health of local shops as it has been for people’s waistlines. Many French people spend a maximum of 20 minutes cooking (2004), and ‘55% eat their main meal in front of the television’.

As with British village pubs, the French equivalent, village bistros (cafes) are also in decline. In the 1960s France had 200,000 bistros; in 2009 it had 35,000 (Guardian, p.19, 26/2/2010). As villages lose their bistro, the boulangerie (baker), boucherie (butcher), and epicerie (grocer) also close. The same trends that are eroding village retailing in the UK also affect France; increase in commuting to towns, decline in village schools, more holiday homes that are unoccupied for much of the year, and the rise in supermarket shopping. The French, once keen supporters of their own national cuisine, are also gradually succumbing to global foods such as burgers and diet coke; traditional village bistros often do not stock such items.

French rural bistros are seeking State support, on the grounds that they are a vital part of the village social fabric; some are also becoming Internet cafes.

Parts of Paris are suffering the same loss of local shops as parts of UK cities (The Guardian, 14 June 2003, p.19). Former small shop premises on inner-Parisian streets are being taken over by textile-trade wholesalers or sweatshop manufacturing enterprises. Some small food shops succumbed to the high-tech and yuppie revolution of the 1990s and became bistros and computer shops; now that bubble has burst and these former premises are obtainable cheaply by the textiles trade. In 2011 France had 80,000 small independent retailers, including 40,000 boulangeries (bakers) and 7,000 charcuteries (butchers).

Despite a recent reversal in the depopulation of the French countryside (Guardian II, 31/3/04, pp.8,9) some 10,000 of the remotest French Post Offices are facing closure, along with a reduction in services on the least-used rural lines of the SNCF.

French petrol stations have also suffered from competition by the big supermarket’s petrol sales, and many rural areas of France have no petrol stations for miles.

Retail multiples

Auchan

Year

Profits

Sales

1991/2

85.1 Bn FFrancs

1993/4

60.6 Bn FFrancs

1994/5

64.3 Bn FFrancs

1995/6

120.0 Bn FFrancs

1996/7

130.0 Bn FFrancs

1997/8

US$ 21.7 Bn

2001/2

Euros 1.06 Bn

Euros 27.5 Bn

2002/3

Euros 1.13 Bn

Euros 28.7 Bn

1967, Auchan opened its first hypermarket

1989, Auchan opened first hypermarkets in Italy

8/2002, Auchan entered Russia

5/2004, Auchan had 4 Russian hypermarkets

Carrefour

Year

Profits (million Euro)

Sales

1991/2

117.1 Bn FFrancs

1992/3

124.5 Bn FFrancs

1993/4

136.3 Bn FFrancs /

28.0 Billion US$

1994/5

144.6 Bn FFrancs

1995/6

154.9 Bn FFrancs

1996/7

2,300

169.3 Bn FFrancs / 25,805 million Euro

1997/8

2,600

27,409 million Euro

1998/9

2,200

51,948*

1999/2000

1,600

64,800

2002/3

76,800

2003/4

1,630

70,500

2004/5

1,440

73,000

2005/6

1,860

77,900

2006/7

2,300

82,100

2007/8

2,800

2008/9

2,200

86,749

2009/10

84,284

2010/11

371

81,300

2011/12

1,230

Year

Profits (million Euro)

Sales

* Merger with Promodes

Carrefour had 68 hypermarkets in 1988, 109 hypermarkets in 1992, and 117 hypermarkets in 1996

Carrefour market share, France, 2006, 24.9%, 2011, 25.0%

Carrefour history

1959, Carrefour began with one supermarket in Annecy. Two French businessmen, Marcel Fournier and Louis Deforrey, spotted an opportunity in French food retailing. In France in the 1950s, department stores were growing, and the French consumer was becoming accustomed to self-service, at least in non-food. However food retailing was still done mainly from independent small shops; department stores were expensive and city centre locations for food supermarkets were hard to come by. Their solution was to set up a food supermarket in the basement of Fournier’s department store in Annecy. The new store was a success, selling out within four days, and in 1963 the pair set up the first free-standing Carrefour.

1963 Carrefour opened a hypermarket (France’s 1st hypermarket; Carrefour’s 2nd store) in Sainte Genevieve de Bois, near Paris.

11/1999, Carrefour acquired Promodes, at a cost of US$ 13.6 billion, to form the world’s 2nd largest retailer after Wal-Mart. The fascias of Promodes stores, and its subsidiaries, Pryca and Continental, across France and Spain, were swiftly changed to Carrefour, in a bid to build the Carrfeour brand.

2002, Carrefour operated 41 hypermarkets, 43 supermarkets, and 228 discount stores (Eurofood, 30/1/03, p.15). By end – 2002, Carrefour had 9,633 stores.

2005 Carrefour aimed to be more dominant in fewer countries. “We want to be one of the top three in a foreign market, or not present at all”, said Carrefour.

10/2005, Carrefour now owns Champion, Ed, and Marche Plus.

International entry and exit schedule of Carrefour

Country

Year of entry

Year of exit

UK

1969

1983

Poland

2005

remains

Belgium

1969

1978

Germany

1977

1979

Portugal

1991

remains

Spain

1973

remains

Italy

1972

remains

Switzerland

2008

Austria

1976

1979

Romania

2008

remains

Russia

2007

remains

Turkey

1993

remains

Iran

2008

remains

India

2011

remains

Thailand

1997

2010

China

1997

remains

Hong Kong

1997

remains

Taiwan

1989

remains

South Korea

1997

2006

Japan

2000

2005

Malaysia

1993

2010

Egypt

2002

remains

USA

1988

1994

Mexico

1997

2005

Venezuela

2001

remains

Brazil

1975

remains

Argentina

1982

remains

Casino

(Owns the Geant fascia)

1991/2, turnover was 61,600 million French Francs


1993/4, turnover was 63,000 million French Francs.




1997/8, Turnover was US$ 12,700 million

Casino (Geant) had 24 hypermarkets in 1988, 49 hypermarkets in 1992, and 108 hypermarkets in 1996

Docks de France

1992, turnover was 32.0 billion French Francs



1996, Docks de France was taken over by Auchan.

Intermarche






1998, turnover was US$ 28.0 billion

Leclerc







LeClerc had 155 hypermarkets in 1988, 298 hypermarkets in 1992, and 373 hypermarkets in 1996

2002, LeClerc entered Italy, in a joint venture with Italian company Conad

2002 LeClerc’s market share in France was 17%

Promodes








End 1999, Promodes merged with Carrefour, to form the world’s 2nd largest retailer after Wal-Mart.

Systeme U




Tesco

Tesco bought the Catteau chain of supermarkets in June 1993 for £150 million. However it pulled out again when it found its brand did not transfer well to France. In 2003 Tesco maintained one supermarket near Calais, selling no food, just alcohol for the ferry passengers.

Portugal Back to top

Retail legislation

1996 Commerce and Tourism Law, special permission required for any new supermarket over 2,000 square metres in a settlement of population under 30,000. Trading hours are between 6am and midnight, including Sundays, to allow for tourist trade.

Carrefour

1989, Carrefour entered Portugal

1999, Carrefour had 366 stores in Portugal

Spain Back to top



Retail legislation

1995 General Commerce Law, special permission required for any new supermarket over 2,500 square metres sales area. Trading hours limited to 72 hours a week and not on Sundays.

Carrefour

1973, Carrefour entered Spain,opening a hypermarket (Spain’s 1st) there.

1999, Carrefour had 3,098 stores in Spain

Erkosi

2006, Erkosi had 80 hypermarkets, 489 Erkosi-fascia-ed supermarkets, 157 Erkosi City supermarkets, also travel agents, petrol stations, sports shops, and perfume outlets

Mercadona

end 2006, Mercadona aims to have 1,065 ‘large supermakets’ in Spain.

Italy Back to top


Italian grocery market shares, January 2007 (source, Eurofood, 7/2/07, p.19) –

Co-op 19.6%, Conad + Interdis 18.9%, Carrefour 9.4%, Auchan 7.88%, Esselunga 6.2%


Some Italian consumers have reacted to the dromological (speed-oriented) lifestyle of globalisation with the ‘Citta Lente’ movement. The aim is a return to the slower-paced traditional Italian lunch without constant access to and by mobile phones, faxes, emails etc. ‘Citta Lente’, founded in 1989 by Mr Carlo Petrini, was initially a response against fast food, provoked by the first McDonalds opening in Rome, in 1986. In 1999 a local Italian mayor extended the concept to cover the lifestyle of an entire town. The is now a University of Gastronomic Sciences in Pollenzo, Piedmont, Italy, teaching such subjects as the anthropology of food, principles of food technology, and the geography of wine (The Independent, 11/10/04, pp.11-12).

Retail legislation

The 1999 Bersani Decree allowed new supermarkets up to a size of 1,500 or 2,500 square metres, depending on the size of the local town. Sunday trading is allowed in tourist areas.

Retail multiples

Carrefour

1999, Carrefour had 912 stores in Italy

Conad

2nd largest retailer in Italy, market share 2002 was 10%

Switzerland Back to top

Retail legislation

Planning presumption against new out of town supermarkets. Trading hours limited to between 6am and 8pm weekdays, generally no Sunday opening.

Aldi

2005, Aldi entered Switzerland.

Migros

Founded by the Swiss philanthropist Emil Duttweiler. In the 1950s he was a fierce opponent of Resale Price Maintenance (see development of supermarkets)


2006, Turnover was Euro 12.75 billion (Swiss Francs 20.64 billion)

Austria Back to top



Retail legislation

The Trading Act limits development of new supermarkets

Retail multiples

Aldi

1989, Aldi had 150 stores in Austria, trading under the Hofer fascia.

Lidl

1998, November, Lidl opened its first store in Austria.

Czech Republic Back to top


In 1996 the Czech Republic had one hypermarket. By 1999 there were 50 hypermarkets in the Czech Republic and just over 100 hypermarkets by 2001.

Carrefour

1999, Carrefour had 5 supermarkets in the Czech Republic

Lidl

12/2003, Lidl had 51 stores in the Czech Republic

Tesco

1996, Tesco entered the Czech Republic.

2001, Tesco had 12 stores in the Czech Republic, under the Tesco fascia.

2005/6, Tesco sales were £473 million; profits were £20 million, market share was 4.7%.

2011, Tesco had 158 stores, a 10.6% market share, and sales were £1,300 million

Slovakia Back to top


2011, Tesco became market leader, share = 18.9%. Kaufland, 2nd = 14.1%. Lidl, 3rd = 13.6%. Bila, 4th = 8.1%

Retail multiples

Billa

2011, Billa had 6.8% market share (4th)

Carrefour

1999, Carrefour had 1 supermarket in Slovakia

Kaufland

2011, Kaufland had 14.1% market share (2nd, behind Tesco)

Lidl

2011, Lidl had 13.6% market share (3rd)

Tesco

1996, entered Slovakia.

2001, Tesco had 10 stores in Slovakia, under the Tesco fascia.

2005/6, Tesco sales were £393 million; profits were £23 million, market share was 11.0%.

2011, Tesco had 97 stores, a market share of 18.9% (market leader), and sales were £996 million

Hungary Back to top


After the fall of Communism, the number of Hungarian retailers soared from 25,000 in 1990 to 60,000 in 2000. Subsequently the appearance of large supermarkets caused a process of retail concentration, and the total number of Hungarian retailers fell back to 45,000 in 2007.

In 2010, 70% of the Hungarian grocery market was held by the five biggest grocery chains, and the next biggest five accounted for a further 20%.

Retail multiples

Tesco

Tesco entered Hungary in 1994, buying a £20 million share in the Global chain. In 1997, Tesco had 43 stores in Hungary, including 2 hypermarkets.

2005/6, Tesco sales were £1,320 million; profits were £74 million, market share was 13.9%.

2010/11, Tesco had 205 stores, a market share of 19.2%, and sales were £2,030 million.

Romania Back to top

Retail multiples

2008, Carrefour continues to expand in Romania, planning on opening 7 new hypermarkets a year there to 2012. Carrefour is the leading supermarket in Romania with a market share (2006) of 47%; Carrefour aims for a 50% share by 2012.

Also present in Romania (2008) are Metro, Real, and Rewe.

Greece Back to top


Share held by top 10 retailers rose from 18.5% in 1990 to 72.0% in 1999 (Retail Strategy, p.5)

Carrefour

1999, Carrefour had 313 stores in Greece.

2012, Carrefour exited Greece in June

Del Haize

2012, DelHaize, though its subsidiary in Greece, Alfa Beta, has 266 stores. Their share of the Greek grocery market has risen from 17% in 2007 to 21% in 2012.

Russia Back to top


Retail food market US$ 239 billion (2011)

Retail legislation

2007, The FAS (Federal Antimonopoly Service) announced that it is to decrease the maximum market share that can be held by any one supermarket chain in any one region of Russia from 35% to 10% (Eurofood, 21/3/07, p.28). Supermarket chains with over 20% of local markets may also face restrictions on further expansion. The Russian President, Vladimir Putin, is concerned about supermarket power over their suppliers in Russia.

Retail multiples

X5

Russia’s largest chain (2008, sales) is X5.

X5 was created in 5/2006 from the merger of Pyaterochka (discounter chain) and Perekrestok (supermarket chain).

X5 sales, 2007/8, US$ 5.32 billion (Euro 3.436 billion), increase 53% on 2006/7

X% profit, 2007/8, US$ 1.404 billion; EBITDA, 2007/8, US$ 479 million.

2010, market share = 4%.

Also present as Lena,

2008, 31 hypermarkets; 14 in St Petersburg and 17 in other large Russian cities.

2010, 39 hypermarkets, sales = US$ 2,5 million

Magnit

2012, 4,547 stores (inc. 4,435 convenience stores and 69 hypermarkets)

Metro

2001, Entered Russia; 88 stores in 2011

Also Azbuka Vkuza, O’Key, Seventh Continent. Carrefour entered in 2009 but left after just four months.

Auchan, entered 2002.

Alpi

Alpi has 28 superstores (2008) and is strong in eastern Russia, Siberia.

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