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| e-intelligence on global retailing - www.planetretail.net LEADING EUROPEAN INDEPENDENT RETAIL GROUPS Prepared by Planet Retail LEADING EUROPEAN INDEPENDENT.

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Presentation on theme: "| e-intelligence on global retailing - www.planetretail.net LEADING EUROPEAN INDEPENDENT RETAIL GROUPS Prepared by Planet Retail LEADING EUROPEAN INDEPENDENT."— Presentation transcript:

1 | e-intelligence on global retailing - LEADING EUROPEAN INDEPENDENT RETAIL GROUPS Prepared by Planet Retail LEADING EUROPEAN INDEPENDENT RETAIL GROUPS Prepared by Planet Retail

2 | e-intelligence on global retailing - ITM (Intermarché)

3 | e-intelligence on global retailing - 3 Copyright Planet Retail

4 | e-intelligence on global retailing - Retail Banner Sales

5 | e-intelligence on global retailing - 5 Source: Planet Retail Store Numbers, 2004 Portugal 215 Spain 82 Germany 3,172 France 3,382 Romania 2 Belgium 62 Poland 127 Serbia & Montenegro 2 Bosnia & Herzegovina 10

6 | e-intelligence on global retailing - Source: Planet Retail % Turnover by Country,

7 | e-intelligence on global retailing - Ranking and Share of the European Retail Market, RankCompanyMarket Share % 1Carrefour7.25 2Metro Group5.40 3ITM (Intermarché)4.03 4Rewe3.91 5Tesco3.39 6Edeka3.20 7Auchan3.10 8Aldi2.75 9Sainsbury Leclerc Schwarz Group Tengelmann Casino Safeway (UK) Migros Marks & Spencer El Corte Inglés Ahold Système U Wal-Mart Somerfield Asda Karstadt Coop Schweiz Boots0.96

8 | e-intelligence on global retailing - Ranking and Share of the European Retail Market, RankCompanyMarket Share % 1Carrefour6.54 2Metro Group5.07 3Tesco3.78 4Rewe3.62 5ITM (Intermarché)3.50 6Auchan3.03 7Aldi2.90 8Edeka2.68 9Schwarz Group Casino Ahold Leclerc Sainsbury Wal-Mart Safeway (UK) Tengelmann Migros El Corte Inglés Coop Norden Marks & Spencer Système U Co-operative Group Coop Schweiz Coop Italia Kesko0.87

9 | e-intelligence on global retailing - Ranking and Share of the European Retail Market, RankCompanyMarket Share % 1Carrefour6.74 2Metro Group5.22 3Tesco4.19 4Rewe3.63 5Schwarz Group3.20 6ITM (Intermarché)3.18 7Auchan3.14 8Aldi3.06 9Edeka Casino Leclerc Ahold Sainsbury Wal-Mart Morrisons El Corte Inglés Tengelmann Migros Système U Co-operative Group Coop Norden Coop Italia Coop Schweiz Kesko Marks & Spencer0.97

10 | e-intelligence on global retailing - Ranking and Share of the European Retail Market, RankCompanyMarket Share % 1Carrefour6.96 2Metro Group5.46 3Tesco4.77 4Schwarz Group3.51 5Rewe3.48 6Auchan3.31 7Aldi3.16 8ITM (Intermarché)2.98 9Casino Edeka Leclerc Ahold Wal-Mart Morrisons Sainsbury El Corte Inglés Tengelmann Système U Co-operative Group Coop Italia Migros Kesko Coop Norden Coop Schweiz Louis Delhaize0.94

11 | e-intelligence on global retailing - Share of the Retail Market by Country,

12 | e-intelligence on global retailing - Top 10 Banners by Retail Banner Sales (EUR mn) 12 CountryFormatBannerSales FranceSupermarketsIntermarché21,322 GermanySupermarkets & Neighbourhood stores SPAR3,934 GermanyDiscount storesNetto2,855 FranceDIY storesBricomarché2,143 PortugalSupermarketsIntermarché1,249 FranceDiscount storesNetto1,074 FranceConvenience storesEcomarché954 GermanySupermarketsEUROSPAR593 FranceNeighbourhood storesLe Relais des Mousquetaires 555 GermanyDelivered wholesale (Independent retailers) Gutkauf535

13 | e-intelligence on global retailing - Corporate SWOT 13 Strengths  ITM is the world’s 15th largest retailer in terms of retail banner sales and the number one supermarket retailer.  France accounts for around 70% of ITM`s sales. The group also has a growing presence in Portugal and is expanding its operations in the potentially lucrative Balkans and Poland.  ITM is ranked number three overall in its core French market with sales accounting for around 13% of the market.  Supermarket banner Intermarché is the group's driving force internationally. Netto, ITM`s discount banner, is gaining market share in France and Germany  ITM has flourished in areas where there have been restrictions on the openings of large sized stores. ITM has been able to open smaller supermarkets, which are less likely to be restricted, in areas which would otherwise be dominated by a hypermarket.  One third of ITM`s own brands are manufactured inhouse, whilst share of group turnover of private labels is increasing by two to three percentage points per year.  The buying groups, Agenor and Alidis, have created additional international buying power for ITM.

14 | e-intelligence on global retailing - Corporate SWOT 14 Weaknesses  Despite overseas expansion, ITM appears to rely on its French division, which accounts for around 70% of overall sales.  ITMs involvement in Germany has been a huge failure with German operations causing significant losses to the group.  Money used to fund operations in Germany could have been better invested in France and elsewhere to refurbish its outdated and untidy stores.  In France, ITM has been hindered by the legislation prohibiting below cost pricing. As a result, the group has been unable to compete with discount stores.  ITM has not upgraded many of its stores for a while and Intermarché outlets can appear shabby and old fashioned.  ITM has an over-optimistic growth strategy with 1,000 Netto discount stores planned to be operating in France over the next three to four years. This represents a rise of around 700 stores from the current 300 Nettos in operation.  ITM is the last multiple retailer in France to offer a loyalty card programme. Rivals Carrefour, Auchan and Leclerc, offer more progressive schemes.

15 | e-intelligence on global retailing - Corporate SWOT 15 Opportunities  By operating both Intermarché supermarkets and Ecomarché convenience stores, ITM is well placed to exploit demand for both weekly and top-up shopping and to grow despite planning restraints.  The retail environments in Bosnia Herzegovina and Romania, are still fragmented and represent an opportunity for the group to consolidate market share.  Michel Pattou, the President of ITM, is actively encouraging alliances with other independent groups Leclerc and Systeme U. This will provide the retailer with opportunities to increase buying power and developing logistic networks.  ITM has announced its retirement from Germany and the sooner the company leaves, the more it can focus on its home market.  The rising popularity of discount stores in Europe offers opportunities for ITM to expand its network of Netto outlets.  There is much scope for ITM to launch other banners such as Écomarché, Netto, Vêtimarché and Bricomarché overseas.  In 2005, the opening of an international logistics centre on the French west coast will enable international goods to be sourced more efficiently and facilitate investment in other overseas markets.  ITM is currently in talks with a number of retailers about their possible entry into the Agenor buying group. This should have a positive impact on ITM’s buying power.  Restrictive store opening legislation for larger formats in France is likely to hinder competitors such as Carrefour. This will help ITM`s independent supermarkets to survive.

16 | e-intelligence on global retailing - Corporate SWOT 16 Threats  Intermarché, along with other supermarket banners, is facing strong competition from discount operators, such as Lidl, Aldi, and Leader Price, who are steadily increasing store numbers in Europe.  ITM`s operations in the Balkans could be potentially threatened by political and economic instability in the region.  The potential recovery of Carrefour in France could take market share away from ITM.  Rivals Carrefour, Casino and Auchan are experimenting with a discount hypermarket format. If successful, the expansion of this format could pose a threat to ITM`s supermarkets and discount stores in France.  ITM has publicly announced its withdrawal from Germany. The group, however will have made huge losses which may ultimately affect investment elsewhere.  Once ITM pulls out of Germany, Agenor’s international buying power will diminish and could potentially become obsolete unless a new retailer joins the buying group.  The competitive market for ITM is likely to look increasingly tough with the worldwide expansion of discount stores, as well as rivals Leclerc and Casino threatening the group`s ranking in France. (currently number three)

17 | e-intelligence on global retailing - Alliances and Buying Groups 17 Agenor ITM /SPAR HANDELS AG Alidis ITM/EROSKI

18 | e-intelligence on global retailing - Leclerc

19 | e-intelligence on global retailing Copyright Planet Retail

20 | e-intelligence on global retailing - Retail Banner Sales

21 | e-intelligence on global retailing Source: Planet Retail Store Numbers, 2004 Portugal 20 Spain 9 Italy 24 France 515 Slovenia 2 Poland 19

22 | e-intelligence on global retailing - Source: Planet Retail % Turnover by Country,

23 | e-intelligence on global retailing - Ranking and Share of the European Retail Market, RankCompanyMarket Share % 1Carrefour7.25 2Metro Group5.40 3ITM (Intermarché)4.03 4Rewe3.91 5Tesco3.39 6Edeka3.20 7Auchan3.10 8Aldi2.75 9Sainsbury Leclerc Schwarz Group Tengelmann Casino Safeway (UK) Migros Marks & Spencer El Corte Inglés Ahold Système U Wal-Mart Somerfield Asda Karstadt Coop Schweiz Boots0.96

24 | e-intelligence on global retailing - Ranking and Share of the European Retail Market, RankCompanyMarket Share % 1Carrefour6.54 2Metro Group5.07 3Tesco3.78 4Rewe3.62 5ITM (Intermarché)3.50 6Auchan3.03 7Aldi2.90 8Edeka2.68 9Schwarz Group Casino Ahold Leclerc Sainsbury Wal-Mart Safeway (UK) Tengelmann Migros El Corte Inglés Coop Norden Marks & Spencer Système U Co-operative Group Coop Schweiz Coop Italia Kesko0.87

25 | e-intelligence on global retailing - Ranking and Share of the European Retail Market, RankCompanyMarket Share % 1Carrefour6.74 2Metro Group5.22 3Tesco4.19 4Rewe3.63 5Schwarz Group3.20 6ITM (Intermarché)3.18 7Auchan3.14 8Aldi3.06 9Edeka Casino Leclerc Ahold Sainsbury Wal-Mart Morrisons El Corte Inglés Tengelmann Migros Système U Co-operative Group Coop Norden Coop Italia Coop Schweiz Kesko Marks & Spencer0.97

26 | e-intelligence on global retailing - Ranking and Share of the European Retail Market, RankCompanyMarket Share % 1Carrefour6.96 2Metro Group5.46 3Tesco4.77 4Schwarz Group3.51 5Rewe3.48 6Auchan3.31 7Aldi3.16 8ITM (Intermarché)2.98 9Casino Edeka Leclerc Ahold Wal-Mart Morrisons Sainsbury El Corte Inglés Tengelmann Système U Co-operative Group Coop Italia Migros1.2 22Kesko Coop Norden Coop Schweiz Louis Delhaize0.94

27 | e-intelligence on global retailing - Share of the Retail Market by Country,

28 | e-intelligence on global retailing - Top 10 Banners by Retail Banner Sales (EUR mn) 28 CountryFormatBannerSales FranceHypermarketsLeclerc24,104 FranceSupermarketsLeclerc2,923 ItalyHypermarkets & superstoresLeclerc730 PolandHypermarketsLeclerc371 PortugalSupermarketsLeclerc309 SpainHypermarketsLeclerc255 SloveniaHypermarketsLeclerc54 FranceForecourt storesLeclerc10 PolandVirtual storewww.supersam24.pl4 PolandSupermarketsLeclerc3

29 | e-intelligence on global retailing - Corporate SWOT 29 Strengths  Leclerc is globally ranked 21st in terms of retail banner sales and is the 10th largest hypermarket retailer.  The group is a major player in France, especially in the hypermarket sector and has a growing presence in Italy, Portugal, and Poland.  Leclerc is ranked number two overall in its core French market with sales accounting for around 13% of the market.  As an independent operator, Leclerc is not obliged to invest as much capital in its stores as an amalgamated retailer.  Leclerc benefits from a low price image, which has benefited from Michel-Edouard Leclerc’s high media profile and his public battle for greater consumer buying power.  Leclerc has a range of high-priced, standard and economy brands. In France, Leclerc's core market, private labels have a penetration of around 27%.  Leclerc’s Eco+ economy range has been particularly successful in the group’s French home market.  The Ticket E. Leclerc customer loyalty scheme has high levels of penetration amongst consumers in France and Portugal.  The retailers have strong loyalty to the Leclerc brand.  Leclerc has formed alliances with other independent retailers, Système U and Conad.  The buying groups, Lucie and Eurolec, have created additional international buying power for Leclerc.

30 | e-intelligence on global retailing - Corporate SWOT 30 Weaknesses  Despite some expansion overseas, Leclerc appears to rely on its French division, which accounts for around 94% of overall sales. Any market share lost in France will therefore have a significant impact on the group’s overall turnover.  Because Leclerc is not an amalgamated operation, decisions are often slow to implement. The group also has little control over their stores  In France, Leclerc has been hindered by the legislation prohibiting below cost pricing. As a result, the group has been unable to compete with the discounters.  Leclerc has been slow to jump on the discount store bandwagon and only began piloting a discount format at the end of  Some of the stores are in need of investment and refurbishment.

31 | e-intelligence on global retailing - Corporate SWOT 31 Opportunities  By operating both hypermarkets and supermarkets, Leclerc can grow despite planning restraints.  The fragmented Italian sector represents an opportunity for the group to consolidate market share in Europe.  Leclerc’s strong pricing image should allow the group to increase market share in France as well as overseas.  Leclerc is hoping to build up a network of forecourt stores in France. This represents an opportunity for Leclerc to become the first major food retailer in France to have a network of forecourt stores.  The rising popularity of discount stores in Europe offers opportunities for Leclerc to develop its own discount formats.  Leclerc is seeking to create its own European organisation of independent retailers, which could present further opportunities for Leclerc in terms of negotiating with suppliers and improving its buying power.  ITM, Leclerc and Système U are forming an alliance with the aim of protecting the interests of the independent retailers whilst plans are being made to reform the Galland Law. This may present opportunities for the retailer in the future.

32 | e-intelligence on global retailing - Corporate SWOT 32 Threats  Leclerc is facing strong competition from discount operators, Lidl, Aldi, and Leader Price, who are steadily increasing store numbers in Europe and taking market share from the hypermarket operators.  Rivals Carrefour, Casino and Auchan are experimenting with a discount hypermarket format. If Leclerc is not quick to launch its own discount formats in France, the retailer may lose out to other French multiples.  Much of the groups logistics is largely delegated to sub-contractors leaving Leclerc vulnerable to disruption by third party business.  The competitive market for Leclerc is likely to become tougher with the expansion of discount stores, as well as rivals ITM and Casino threatening the group’s ranking in France.

33 | e-intelligence on global retailing - Alliances and Buying Groups 33 Lucie Leclerc/Système U Eurolec Leclerc Conalec Leclerc/Conad Ifa Espanola Leclerc,Ahorramàs, Caprabo,Gadisa, Miquel, Condis, Alimerka Worldwide Retail Exchange

34 | e-intelligence on global retailing - Système U

35 | e-intelligence on global retailing Copyright Planet Retail

36 | e-intelligence on global retailing - Retail Banner Sales

37 | e-intelligence on global retailing Source: Planet Retail Store Numbers, 2004 Mauritius 2 Martinique 2 France 873 Reunion 12

38 | e-intelligence on global retailing - Source: Planet Retail % Turnover by Country,

39 | e-intelligence on global retailing - Ranking and Share of the European Retail Market, RankCompanyMarket Share % 1Carrefour7.25 2Metro Group5.40 3ITM (Intermarché)4.03 4Rewe3.91 5Tesco3.39 6Edeka3.20 7Auchan3.10 8Aldi2.75 9Sainsbury Leclerc Schwarz Group Tengelmann Casino Safeway (UK) Migros Marks & Spencer El Corte Inglés Ahold Système U Wal-Mart Somerfield Asda Karstadt Coop Schweiz Boots0.96

40 | e-intelligence on global retailing - Ranking and Share of the European Retail Market, RankCompanyMarket Share % 1Carrefour6.54 2Metro Group5.07 3Tesco3.78 4Rewe3.62 5ITM (Intermarché)3.50 6Auchan3.03 7Aldi2.90 8Edeka2.68 9Schwarz Group Casino Ahold Leclerc Sainsbury Wal-Mart Safeway (UK) Tengelmann Migros El Corte Inglés Coop Norden Marks & Spencer Système U Co-operative Group Coop Schweiz Coop Italia Kesko0.87

41 | e-intelligence on global retailing - Ranking and Share of the European Retail Market, RankCompanyMarket Share % 1Carrefour6.74 2Metro Group5.22 3Tesco4.19 4Rewe3.63 5Schwarz Group3.20 6ITM (Intermarché)3.18 7Auchan3.14 8Aldi3.06 9Edeka Casino Leclerc Ahold Sainsbury Wal-Mart Morrisons El Corte Inglés Tengelmann Migros Système U Co-operative Group Coop Norden Coop Italia Coop Schweiz Kesko Marks & Spencer0.97

42 | e-intelligence on global retailing - Ranking and Share of the European Retail Market, RankCompanyMarket Share % 1Carrefour6.96 2Metro Group5.46 3Tesco4.77 4Schwarz Group3.51 5Rewe3.48 6Auchan3.31 7Aldi3.16 8ITM (Intermarché)2.98 9Casino Edeka Leclerc Ahold Wal-Mart Morrisons Sainsbury El Corte Inglés Tengelmann Système U Co-operative Group Coop Italia Migros Kesko Coop Norden Coop Schweiz Louis Delhaize0.94

43 | e-intelligence on global retailing - Share of the French Retail Market,

44 | e-intelligence on global retailing - Top 10 Banners by Retail Banner Sales (EUR mn) 44 CountryFormatBannerSales FranceSupermarketsSuper U10,650 FranceSuperstoresHyper U2,083 FranceSupermarketsMarché U812 ReunionSupermarketsSuper U83 MartiniqueHypermarketsHyper U81 ReunionSupermarketsMarché U23 MauritiusSupermarketsSuper U12

45 | e-intelligence on global retailing - Corporate SWOT 45 Strengths  Despite some operations in French Dom Tom and Mauritius, the group has stated that it has no ambitions overseas and is therefore able to fully concentrate on French operations.  The group is currently in the process of modernising its stores  Système U's own label products account for one quarter of total sales.  The group has introduced a discount brand ‘Bien Vu’ to its private label range.  Around 50% of Système U's customers use the Carte U loyalty card.  Système U has store sizes ranging from 600 to 5,000 square metres allowing the retailer to circumvent the restrictive property regulations governing larger stores.  The joint buying office, Lucie, which has been operating with Leclerc since 1999, has improved Système U’s buying power  Improving the group’s logistics network in France is a key strategy in 2005.

46 | e-intelligence on global retailing - Corporate SWOT 46 Weaknesses  Système U relies on the French retail market, accounting for 99% of retail banner sales and therefore does not benefit from diversified operations.  Système U has been hindered by the legislation prohibiting below cost pricing. As a result, the group has been unable to compete with the discounters.  The group has not launched a discount store as yet in France and is therefore at risk of losing market share to the discounters.

47 | e-intelligence on global retailing - Corporate SWOT 47 Opportunities  The multiformat strategy enables the group to adapt new stores to the size of town and the restrictive property regulations governing store size.  Système U plans to expand its presence in Brittany and Normandy through the extension of all existing stores in the two regions. The group's focus on Western France will be reinforced by the improved logistics platforms currently being built in Nantes and Cotes-d'Armour.  Système U’s ranking in Europe is expected to improve over the next three years with the retailer moving to 18th position in 2008 from the position of 21 in  ITM, Leclerc and Système U are forming an alliance with the aim to protect the interests of the independent retailers whilst plans are being made to reform the Galland Law. This may present opportunities to the retailer in the future.

48 | e-intelligence on global retailing - Corporate SWOT 48 Threats  Système U is facing strong competition from discount operators, Lidl, Aldi, and Leader Price, who are steadily increasing store numbers in France.  ITM is currently in the process of upgrading its supermarkets. This may take market share away from Système U’s supermarkets.  Aggressive marketing campaigns promoting rock bottom prices by retail giants such as Carrefour may make it impossible for less significant retailers such as Système U to compete.  The competitive market for Système U is likely to become tougher with the expansion of discount stores in France.

49 | e-intelligence on global retailing - Alliances and Buying Groups 49 Lucie Leclerc/Système U

50 | e-intelligence on global retailing -


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