Tesco Polska is setting a new trend in the daily shopping habits of consumers, so they launched some time ago their Tesco Extra stores. 4 locations are available in Czestochowa, Lodz, Nowy Sacz, Poznan and more will be opened in 2011.
Tesco Extra stores will be offering more quality and premium products in their assortment.
Last week I had the chance to drop by the Lodz point-of-sale, a very nice store, the categories nicely dispersed, enjoyable atmosphere and lighting.
Petit Casino, flagship of proximity stores of Group Casino, is about to change its name: Casino Shopping for stores over 350m² (700 potential units) and Casino Shop for stores less than 350m² (1200 potential stores). The 1st Casino Shopping will open its doors in Marseilles before the end of April 2011.
This is the answer, as expected, from Groupe Casino on the offensive of all its competitors in the proximity stores business. A perfect response: When Carrefour (Carrefour City, Carrefour Contact), System U (U Express, Utile), Intermarché (Intermarché Express) or Auchan now with A2Pas, are moving forward with dedicated concepts in order to optimize the time consumers are spending during shopping.
“We want to focus on enjoyment and conviviality” explains Jean-Pierre Lanzetti (CEO of Casino Proximité). His objective: to become France’s favorite store. “Our competitors have a choice in their approach to proximity. They work on physical proximity rather than on emotional closeness. It is this relationship with our customers that we want to strengthen.”
The new store design features a chocolate brown and fuchsia pink color scheme and a smoothed, curved interior lay-out. The aim is to give customers “roominess and modernity” with a gourmet and feminine twist.
Sweden/Sverige, officially the Kingdom of Sweden , is a Nordic country on the Scandinavian Peninsula in Northern Europe. Sweden shares borders with Norway and Finland and is connected to Denmark by a bridge-tunnel across the Öresund.
At 450,295 square kilometres, Sweden is the third largest country in the European Union by area, with a total population of about 9.4 million. Sweden has a low population density of 21 inhabitants per square kilometer with the population mostly concentrated in the southern half of the country. About 85% of the population live in urban areas.Sweden’s capital is Stockholm, and with 1.3 million inhabitants, it is also Sweden’s largest city.
The retail scene of the Swedish market is a bit different from other European countries, mainly western ones, where big groups are controlling the mini/super/hyper daily game, while in Sweden, it’s the Swedish retail brands themselves who have full domination of their own field and so far no external player showed up except in the hard-discount format.
Swedish retail market is dominated by 4 local players who, together they manage 97% of the total market size: ICA, COOP, AxFood and Bergendahls.
The hard-discount format also exist, where Lidl (Germany) and Netto (Denmark) are simply enjoying 2% of the total market size and the last 1% are all the rest.
Another store category is working in the shadow silently, the ethnic stores, well organized in Sweden, but with limited dispersion in the populated areas of Stockholm and its suburbs, these stores are mostly owned by immigrants and their surface varies from 100 to 700 sqm.
The Polish retail scene is not much different from the rest of East and West European markets, but when it comes to the Hard-Discount sector, a major player is out there and trying to control it 100% against the other smaller players who are way behind Biedronka in this race.
Today Biedronka (the ladybug in Polish) owned by Portuguese Jeronimo Martins has more than 1,600 stores located both in large cities and small towns around Poland and regularly visited by 58% of Poles.
Biedronka increased its sales by 29% in 2010. Such results placed the chain among the three largest Polish companies. According to Jeronimo Martins, Biedronka’s sales revenues for 2010 totaled around PLN 19.2bn (€4.81bn).
At present, the chain is comprised of 1,649 stores with an assortment of 900 products with 9 active distribution centers and 2 new DC coming in 2011.
In 2010, Biedronka opened 183 new stores and the plan for 2011 is 200 new stores and a total of 3,000 stores by the end of 2015.
The followers in this game are the Germans Lidl (380 stores) & Aldi (45 stores), the Danish Netto (200 stores) and soon to become discounter local chain PoloMarket (300 stores).
All 4 of them, are watching and monitoring Biedronka’s moves very closely but the latter is not even losing time looking around as they are busy being aggressive.
Plus the purchasing power that is now in the hands of Biedronka is not accessible by others, just imagine the pressure they put on suppliers and brand principles for a simple promotion operation in all their stores for a week or 10 days, let us say they will order an average of 3 cases of 1 product in 1650 stores, that is 4950 cases or around 60,000 units, so they can easily twist your elbow when it comes to price.
The war is going on between the retailers (supermarkets and hypermarkets) and the suppliers (brand principles) and if you are wondering why, it is because of the non-stop products price increase.
And no matter who will win at the end of the tunnel (it is a very very long tunnel), the biggest loser will be the consumer as both parties are trying to pass the new cost(s) to him.
Some retailers are categorically refusing the new rising costs while others are putting a limit for the increase by fixing a percentage (Leclerc in France limited it to 2%), and some (which I hardly believe) are cutting some points from their own margins to keep the prices aligned because they would like to maintain their status of EDLP (everyday low prices).
Definitely the biggest part of this pressure is on the suppliers because of the endless influence of retailers and the ability of buyers to say “NO” (sometimes no matter what you offer them).
Therefore some suppliers will follow a new tactical move and it is by decreasing the packaging size, which means offering less for the same price, leading to have a higher unit price and making it difficult to consumers to spot the difference and in my opinion this is not ethical.
Some brand principles have a different point of view, such as increasing prices and all the rest will follow but this is a risky step to take and needs some time to be reflected on the market and might take some consumers away from picking their products and some other principles might take advantage of this by waiting some time and giving the impression that their prices are stable and this might lead to some confusing on the consumer decision making while at the shelf.
During all this dilemma, the retailers are giving more hard time to suppliers by cutting down their assortments and removing under-performing products provided that this will not hurt the consumer basket, consequently this will help them optimize their shelves with products bringing more margins to their pockets.
We have also seen some extreme situations, where retailers delisted well known international brands, as example, Costco in the US removed Coca-Cola from its shelves for 3 weeks back in 2009 and in the UK, a Tesco and Premier Foods dispute for same reasons, led to the removal of 12-18 products from the shelves.
Before judging who is right or wrong, one thing is sure, the power continues to shift into the hands of the retailers, and this goes for every and each market and country.
