RETAIL LOOK DEEPER INTO - Food retail, into a digital world - SIAL Canada
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LOOK DEEPER INTO…
RETAIL
Food retail,
into a digital world
Who are
Market Highlights A retail world tour
the players’?
China, UAE, Canada,
Walmart, Tesco, Key figures…
Europe, Indonesia...
Amazon…
PAGE 3
PAGES 4-8
PAGE 2
Let’s look deeper into… retail 1
JUST A FEW WORDS ABOUT…
FOOD RETAIL
Food retail is at a crossroads. The need for a more How does this revolution take place? Who are the
sustainable business forces all actors to rethink their new players? What are the key factors to continue
approach. At the same time, consumers buy more growing? What are the new opportunities? Local or
and more food online, a trend that deeply affects global, chains or independents, online or physical
food retail pioneers. Some experts even consider retail… the future of food retail is being built today!
that we are witnessing a 'retail apocalypse'.
KEY FIGURES
Turnover: US$ 5,500 billion
Increase of 40% in water demand Increase of 70% in food demand
2030 2050
In 2030, 66% 9,7 Bns
of the Global inhabitants in 2050
Middle class will (44% in Asia)
be in the Asia
Pacific region
WHO ARE THE PLAYERS? FOOD RETAIL…
WHAT ARE WE TALKING ABOUT?
Walmart Costco Aldi
Retail food is all food, other than restaurant food,
Tesco Kroger Target
purchased by consumers and consumed off-premise.
Amazon Lidl Aeon Retail food comes in all shapes and sizes!
Carrefour Metro
Distributors Shelves
GLOBAL FOOD RETAIL MARKET
Shopping Stores
Goods
5 top trends
- The rise of the plant based diet.
- Authentic and healthy food are everywhere. Online
- Tech and food retail have become inseparable. Carts Clients
- Private labels are now like brands.
- The biggest growth rates in grocery?
In developing countries.
2 Let’s look deeper into… retail
GLOBAL OVERVIEW
THE FOOD RETAIL MARKET TODAY
Food expenditure per person per year
No data $0 $600 $1,200 $1,800 $2,400 >$3,000
SALES VALUE WHAT ABOUT
OF GROCERY RETAIL WORLDWIDE THE ORGANIC RETAIL MARKET?
in 2016 and 2021 Regional comparison 2017, US$
12 500
Eastern Europe
Oceania
10 000
Middle East
Latin America and Africa
Global market:
North America Latin America 40,438 US$
7 500
Africa and million
Middle East
Australia
5 000
Asia Pacific
Europe
2 500
Western Europe
North America
0
2016 2021 Asia
Let’s look deeper into… retail 3
CHINA
A COUNTRY FOR DYNAMIC PLAYERS
This is the world’s number one Market! 1.379 billion pure players enjoy several advantages! But traditional
inhabitants, a GDP of US$ 11.2 billion and a growth players have not been defeated yet. Some of them are
rate of 6.8% in 2017… China’s consumption of food and implementing an original and efficient online strategy
beverage products is expected to continue increasing for to meet the consumer needs while penetrating fourth-tier
the foreseeable future. Better quality, safer products, more cities. In China, the retail landscape can’t stop changing!
authentic food… the demand for premium food products
will similarly increase as urban households continue to get
wealthier and dedicate a larger amount of their annual NATIONAL AVERAGE PER CAPITA
expenditures to food. All good news for the retail industry, CONSUMPTION OF MAJOR FOODS
and more specifically for recently emerged players, such (2015, UNIT KG)
as small sized convenience stores and specialty stores
120
(which are to remain the most prominent retail models Grain (Unprocessed)
within the next few years). Yet, large retailers are taking 2014 2015
Fresh Vegetable
market shares. Better supply chains, wider distribution 100
Source: 2016
channels, and larger resources to source directly from China Yearbook, National
80 Bureau of Statistics of China
domestic and international suppliers… they are in a
better position to offer high quality and premium priced
60
food products, especially in third-tier cities. But for all
players, another issue is at stake: succeeding a transition
40
from offline to online business. A change not that easy Meat
Milk &
as it seems… Many pure players such as fruitday.com or Oil Aquatic
20 Dairy
fieldschina.com are able to use warehouses outside of city & Fat Products
Poultry Eggs
centers to deliver their customers. Larger offer, lower rents, Nuts Sugar
0
ability to use data analyses and adjust to trends faster…
FOOD RETAIL IN UAE:
STILL AN EMERGING MARKET
The market is categorized by a high number of retailers, range of products, larger retail space and convenient
with the top five players accounting for 14.8% of the locations. Other winners are chains located in shopping
total grocery market share! A very limited market share centres, benefiting from a funnel of consumers being
compared with that of the Western Europe. Another drawn to shopping malls. What about online shopping?
feature of the UAE retail landscape is that many key The current percentage of e-grocery out of the total retail
retailers have partnered with foreign companies to sales was 0.62% in 2015, and forecasted to remain
import food products. But things are changing rapidly, under one percent up to 2020. The reason for the lack
just like the country. A growing population, increasing of demand is due to consumers’ concerns with the safety
tourist numbers and rising incomes will all contribute to and security of the online shopping. The UAE is actually
pushing UAE food consumption to 59.2 million tonnes still an emerging market. But the Dubai Expo 2020 event
annually by 2025! This is obviously good news for the could become the cornerstone of a new era, opened to
retailers, more specifically for modern grocery players new players willing to offer a more distinctive experience
which already dominate the market, thanks to their wider to customers!
TOP FIVE LEADERS IN GROCERY RETAILING (IN MILLION US$)
LuLu Group Carrefour Spinneys Choithram Al Maya
2020 1,971.2 1,605.7 603.4 468.8 396.3
2019 1,894.6 1,470.8 570.9 452.8 380
2018 1,819.8 1,343.20 531 437.3 364.1
2017 1,752.3 1,227.7 220.8 422.3 348.8
2016 1,681.7 1,120.5 474.2 407.6 329.9 Source: Planet Retail, 2015
4 Let’s look deeper into… retail
“
RETAIL GETS AUTOMATED
AND RE-HUMANISED
ALL AT ONCE
Interview with Jérôme Gayet, co-founder of the Institut du
Commerce Connecté ("Connected Commerce Institute")
Is the globalisation of food trends also being felt in the world of retail?
"There is indeed a phenomenon of mimicry and internationalisation observable in food trends, which also affects retail.
Take retail in China: today, despite maintaining its local characteristics, it has far more points in common with the
Western world than in the past. Firstly, in terms of the organisation and structure of the sector; secondly, quite simply
in terms of the products on offer. Tastes and flavours have become considerably internationalised, as the success of the
burger demonstrates."
What are the trends currently at work in the retail sector on Planet Food?
"The strongest trend is toward the re-humanisation of trade. What precisely is meant by this? Well, store chains are
reducing the size of the sales floor, and smaller supermarkets, Click & Collects and food markets are riding high while,
at the same time, hypermarkets are being trimmed down by several hundreds - or even thousands - of square metres.
Town centres are seeing the return of retailers who had abandoned them, and the short supply chain model is going
from success to success! Another illustration of this humanisation trend is the blurring of the boundaries between retail
and foodservice. Consumers are increasingly getting the opportunity to enjoy food in the stores themselves. It is a trend
that is loudly echoed in the emergence of food halls, such as Eataly."
China “
What is the locomotive - or flagship country - driving retail today?
"This would undoubtedly be China, because retail there has been able to develop the potential of a new dimension for
trade, like no other country: communicability and services. An eloquent example of this is Hema, a local supermarket
chain which uses a high-performance mobile app to offer its users a unique digital and taste experience. You can do
your food shopping - for fresh produce in particular - and have it delivered to your home or workplace in less than half
an hour. Or else you can get a Hema chef to prepare your meal using selected ingredients! Thirdly, you can make your
own way to the store to select your favourite products, or enjoy dishes prepared for you in a foodservice zone set up
inside the supermarket. Chinese consumers are won over because they are the ones in control. Another example of this
local dynamism is the "Auchan Box": mini-supermarkets measuring 20 m², set up in well-frequented locations, totally
automated, where you serve yourself and pay for your purchases with your cellphone. In short, China is now the place
where the new retail models are being invented!" “
UAE “
What about the United Arab Emirates, and the Middle East?
"The United Arab Emirates are a bit like the Middle East, with a very large population of expats - who have a lot of
money to spend - and fairly limited local agriculture. This market structure clearly makes itself felt in the retail offering
with, globally, a fairly underdeveloped organic business, a private-brands offering toward the premium end - but at
attractive prices - and, of course, strong representation of gourmet products, to meet the expectations of a demanding
clientele. In fact, the Middle East market is strongly influenced by what we might call "World Food", in the absence of
firmly-established culinary traditions. Furthermore, the store chains that tend to prosper are those that make the best
success of the international products mix. Recently, the main players in retail in the United Arab Emirates have rolled
out more and more mid-sized supermarkets, to get closer to customers and play the proximity card: successfully it would
seem. Another peculiar feature of this market is that connected commerce has not really taken off, particularly due to
payment and delivery security issues. This may be another avenue for development..." “
Let’s look deeper into… retail 5
CANADA
IT’S ALL ABOUT PRICE AND QUALITY
In Canada, food and beverage sales account for interest in mobile shopping in Canda… a new source
17% of the retail landscape, with 2016 sales valued of differenciation for food retailers?
at C$145 billion. As the market is expected to reach
C$154.3 billion by 2021, there’s no shortage of
opportunities, more specifically for chains… Indeed, OVERVIEW OF THE RETAIL
the market is dominated by three major retail CHANNEL MARKET SHARE
chains, recently strengthened after having acquired
several regional grocers and drug retailers. In 2016,
Other 3%
approximately 58% of food sales were sold through
traditional grocery stores, such as Loblaws, Sobeys and Drug 9%
Metro–though Costco and Walmart have gained market
shares within the last 5 years. For all players, price and Convenience & Gas 3%
quality are the major issues at stake, given the fierce
competition taking place. This is why it’s not a surprise
at all to see all grocery retailers developing discount Independant and
banners and premium private labels. Other trends Specialty Stores 7%
retailers are more and more working on are supply chain
transparency, healthy food, organic food and plant-based Mass Merchandisers/
products. But will these efforts be sufficient to maintain Club Stores 20%
market shares and margins? As in most developed
countries, online shopping might reshuffle the cards. Supermarkets and
Traditional Formats 58%
It’s all the more true in a large country with a low density
of population. One quarter of millenials expresses a high
IN FRANCE, NEW PLAYERS
WANT TO SHAKE UP THE MARKET
70% of French household food purchases are made in suburbs of Paris in 2017 and is now planning to open
medium/small outlets, as well as in local supermarkets. more than a dozen of wholesale clubs. In France, the
Good news for chain operators, which were able to food retail business changes very quickly, and French
better cover the territory in recent years thanks to an consumers are getting offered more and more options!
intensive outlet expansion, especially in big cities. In
the meantime, retailers have developed their e-food
MARKET SHARE OF GROCERY
sales through websites, home delivery, and drive-thru
service. Today, France comprises more than 4,000 STORES IN FRANCE (IN OCT. 2017)
outlets of drive thru service. A true and unique success
in Europe (this service now represents 5.5% of the total E.Leclerc Group 21,3%
food sales)! Yet, hyper and supermarkets remain the Carrefour Group 20,2%
most popular stores, still ahead of specialized food Intermarché Group 14,8%
stores. Investing in the development of private labels, Casino Group 1,6%
they now reap the benefits of their efforts! And what
Système U Group 10,8%
about organic food chains? Their market share can’t
Auchan Group 10,4%
stop growing (+20% in 2017)! In the first four months
of 2017, 61 specialist organic stores and organic Lidl Group 5,2%
supermarkets were opened ; and the total turnover of Delhaize Group 3,3%
the organic industry now exceeds 7 billion euros! Other Aldi Group 2,1%
new players are putting a spoke in traditional retailers’ Other 0,3%
wheel. For instance, Costco opened a store in the
6 Let’s look deeper into… retailCanada “
Where do the United States and Canada stand
today?
"Both of these countries of course remain drivers in
creating and developing new concepts. Let's not forget
the success of Whole Foods! Let's not forget, either, the
success of home delivery services. This is a very strong
trend in these two countries. You only have to consider
the success of Instacart, a service that originated in
California (a State that is often the birthplace of new
concepts for the whole of North America) and which
allows you to get your food shopping delivered to your
home by a "personal shopper" - who could be your
own neighbour - with the products coming from any
given local store. The risk for the big chains from this is
losing the link with the customer!
Still in North America, there is another booming trend:
the connected refrigerator, which can automatically
do your shopping for you once you run out of an
essential product. These are all cases of what you
might call 'effortless shopping'. More and more
models of connected fridges are being produced, and
it would be a mistake to consider this innovation as
a mere gadget."
“
France “
Does the French market reflect worldwide developments?
"Yes, since the development of e-commerce has been growing in recent years, with more and more online offerings,
including via mobile phone. There is also an increasing number of automatic checkouts in supermarkets, proof that
France is perfectly at ease with the new technologies. That said, France maintains its own stand-out features, with an
organic retail sector that is now well-established, far more than in other countries of Europe, and which continues to
make great strides, in particular with the development of a more "general public" offering alongside the specialised
offering. Another trend that is on the increase in France is - once again - the local store. Store chains are reinvesting
heavily in town centres, particularly since millennials are less prone than their elders to jump into the car to do
their shopping. Globally, there is also a rising sense in France of an experiential trend, which concerns all store
categories, and is about rediscovering the real meaning of commerce, in other words: taste, sharing and pleasure.
In this context, the hypermarket model, which has been subject to so many attempts to reinvent or transform it,
continues to pursue its metamorphosis."
“
Let’s look deeper into… retail 7PRICE, QUALITY AND SERVICES
The European market is dominated
by traditional players, from France, Germany,
and the United Kingdom. Yet, several ‘new’ retailers
are trying to emerge, especially discounters (like Lidl
in France), not to mention the pure players…
The main sales argument in Europe? Price, quality
and services. According to many experts, the ability
to develop an online selling option and smart
logistics to end-users will be the drivers of success,
for the next decade.
Top 10 food retailers in Europe
(in terms of turnover, in Billion €))
Turnover
Rank Retailer Headquarter
Europe
1 Schwarz 97 Germany
2 Aldi 59(e) Germany
3 Carrefour 57 France
4 Tesco 56 UK
5 Edeka 56 Germany
6 Rewe 54(e) Germany
7 E.Leclerc 37(2016) France
8 Les Mousquetaires 37 France
9 Auchan 34(e) France
10 Sainsbury 33 UK
INDONESIA, A YOUNG COUNTRY
Indonesia is the 4th most populous nation in the world (with a population
of approximately 265 million in 2018), and 50% of the population
is between the ages of 5 and 34 years! Even better: The middle class
now accounts for 57% of the total! A windfall for food retailers…
Hypermarkets, supermarkets, and local markets continue to develop
as purchasing power increases and lifestyles change, especially
in urban areas. In Indonesia, online food shopping has so far only
been initialled. Indonesia is definitely a country full of opportunities
for retailers, though the development of chains is still limited
by local authorities, willing to protect traditional retailers.
SIAL Network - July 2018
Sources : Nielsen Cabinet - Nielsen ScanTrack - Alpen Capital - Businessinsider - Bloomberg - FDA - Research and
markets - Businesswire - LSA - CCFA - OFC - Canadian Grocer - Euromonitor
Photo
8 credit : Images by www.stockfood.com Let’s look deeper into… retailYou can also read
