Private Label Strategy in Carrefour - Business Insights

Private Label Strategy
in Carrefour
Best practice for food, drink and personal care manufacturers
in association with...
Published August 2005
New Management Report
from
Top 10 private label products in Carrefour*
France
PL share
%
Belgium
PL share
%
Spain
PL share
%
Portugal
PL share
%
1 xxx 63.2 xxx 67.6 xxx 63.6 xxx 38.9
Must have data and
insight for:
2 xxx 62.5 xxx 55 xxx 60.9 xxx 35.8
3 xxx 61 xxx 54.3 xxx 56.7 xxx 35.7
4
Toilet
Tissues
58.2 Jam 30.3 Cooking Oil 55.8
Fabric
Conditioner
34.1
5 xxx 57.1 xxx 27.8 xxx 55.7 xxx 33.8
6
Canned
Tomatoes
57 Cold Meats 27.1
Canned
Fish
48.2
Frozen
Vegetables
7 xxx 56.8 xxx 27 xxx 46.1 xxx 25
8 Fruit Juice 54.3
Bean &
Ground
Coffee
26.2
25.6 Fruit Juice 45.6 Fruit Juice 15.9
9 xxx 50.2 xxx 24.6 xxx 39.9 xxx 14.7
1.
Companies supplying FMCG
brands to Carrefour
10 Fresh Pasta 49.5 Rice 24.1 Ice Cream 34.8
Difference
between top
and tenth
product
Still Mineral
Water
12.2
13.7 43.5 28.8 26.7
Source: Private Label Strategy in Carrefour:
Best practice for food, drink and personal care manufacturers
* The complete table revealing the top 10 private label products in Carrefour is
available in the report
2.
Private label companies
supplying FMCG products
to Carrefour
“Top private label products are commoditized products, apart from in Belgium, which has a
much weaker private label sector for Carrefour hypermarkets. Canned foods are top of the
private label share list, apparent in France, Belgium and Spain, and always with a high share of
total sales taken by the private label version. Canned tomatoes in particular, have appeared in
each list...”
Source: Private Label Strategy in Carrefour
3.
Companies looking to
establish a supplier
relationship with Carrefour
Identifying the major growth opportunities in
your food, drink, personal care and household
care products...
This is the definitive report
on Carrefour’s private label
strategy.

1 Business Insights
Private Label Strategy in Carrefour
Best practice for food, drink and personal care manufacturers
What our clients say...
“I found the report to be most
useful, perhaps because it provided
an overview from different category
perspectives. I felt that the report
benefited from the consultant
approach and offered original and
considered thinking, rather than the
'shot in the dark', naive approach I
have seen in other reports...”
Business Development Director
Kraft Foods
This new report provides exclusive gold standard data
from AiMark and Europanel (from GfK and TNS) as
well as trusted analysis from established private label
experts from Business Insights.
Carrefour is the world’s second largest retailer with a diverse range of private labels. Its
presence in 31 countries gives this new management report a huge breadth of coverage
with in-depth private label data analysed in eight of the Carrefour group’s core European
markets.
Business Insights has teamed up with Europanel (from GfK and TNS) and AIMARK to bring
you this brand NEW unique report, Private Label Strategy in Carrefour: Best practice
for food, drink and personal care manufacturers. This new report provides data for all
the formats that the Carrefour group operate, including their discount stores - the main
driver for the growth in private label. The report is written for food, drink, personal
care and household care manufacturers enabling you to gain a unique insight into
successful and unsuccessful food, drink, personal care and household care categories in
the Carrefour group revealing the threats and opportunities that you may face.
Unique information from a panel of 178,000
households analysed by private label experts
The data and analysis in this report is based on consumer panels of Europanel
(from GfK and TNS), used to derive exclusive information on category sizes, brand and
private label market size, share and pricing, retailer shares, household penetration and
frequency of purchase.
Price premium of national brands over
private label in France
With research and analysis conducted through 2004 and 2005, this report
incorporates data from a survey of 25,000 consumers and a panel of 178,000
households.
Price Index branded/PL
240
220
200
180
160
140
120
100
Yogurts
All retailers
Carrefour
Champion
Sweet Biscuits
Pasta
Mayonnaise
Margarine & Spreads
Instant Coffee
Fruit juice
Colas
Beer
Still Mineral Water
Sanitary Protection – Pads
Shampoo
Private Label in Carrefour - know your market
The report provides:
• Case studies of Carrefour’s private label ranges revealing their labeling, positioning
and quality strategies.
• Analysis of brand vulnerability and the price premium of national brands over
private label in Carrefour.
Source: Private Label Strategy in Carrefour
“The product with the biggest difference in price
between branded and private label in Carrefour
hypermarkets is colas. Branded colas are over twice as
expensive as Carrefour's private label colas.
Consumers have an attachment to the two leading
brands, Coca-Cola or Pepsi...”
• Unique data on the private label share analysing penetration, growth and success
in the Carrefour group in France, Belgium, Spain, Portugal, Czech Republic, Italy,
Poland and Switzerland.
• A breakdown of Carrefour’s private label strategy in each of its formats across
europe.

Business Insights
2
Private Label Strategy in Carrefour
Best practice for food, drink and personal care manufacturers
Key findings of this new report
• In Portugal, Carrefour hypermarket’s share of private label sales are below
market average. A large number of Carrefour’s customers in Portugal are over
65. At this age, the consumer no longer has large families to provide for and
therefore it is likely the discount concept of saving on cheaper private labels are
not as important to them. Private label share is driven by Minipreço where 43%
of turnover is in this sector.
• Overall, the fastest growth private label sector for Carrefour hypermarkets
is household care products. In Portugal, Carrefour has experienced the most
growth in this private label sector with a growth of 8.7% from 2000 to 2003.
• In 2004, 38% of turnover in Carrefour hypermarkets was in non-food
products. Therefore the Carrefour group are developing their non-food range in
the hypermarkets and supermarkets, worldwide.
• In 2005, private labels had a share of 21% in dry grocery sales, national
brands have a share of 74% and fighting brands, which are the cheapest on
display, have a share of 5% in Carrefour’s dry grocery sales.
• Carrefour’s discount strategy carries a number of inherent risks, which
include switching customers from higher value to lower value private labels or
from brands to private labels. Consumers will be trading down and may no
longer see the value in premium products.
Positioning of Carrefour's private labels relative to
price in biscuits
Higher price
Healthy
Carrefour
Bio
J’aime
No.1
Produits
Carrefour
Discount
Source: Private Label Strategy in Carrefour
Escapades
Gourmandes
Reflets
de
France
Gourmet
“Produit Carrefour is the standard label analysed. The
biscuits are 37% more expensive than No.1 at €0.52 per
100g. Although not a gourmet product, the Produit
Carrefour chocolate biscuits are priced identically to
the premium positioned Reflets de France product. The
price premium over No.1 also places the Produit
Carrefour product as a standard/gourmet consumer
product (everyday indulgence)...”
Carrefour shoppers vs competition: PL attractiveness
-0.4 -0.3
-0.2 -0.1 0 0.1
0.2 0.3 0.4
Actionable strategies to drive profit growth
High Brand
Trust and
Price-Quality
Inference
ATAC
CORA
GEANT
• Increase your market share by identifying where the major growth
opportunities lie in your food, drink, personal care and household care
products by analysing the success of private label categories, top 10 private
label categories and the fast growth private label sectors in the 4 core markets of
France, Spain, Belgium and Portugal.
SYSTEME U
CHAMPION
AUCHAN
INTERMARCHE
CARREFOUR
Below average
LECLERC
Above average
• Maximise your profit by analysing the sectors where there are large
premiums on branded products and uncover the price premium of national
brands over private labels.
• Discover whether Carrefour’s private label strategy will affect your brand
sales by identifying their short and long term strategies.
Source: Private Label Strategy in Carrefour
“The typical shoppers in Carrefour and Champion are less
inclined to buy private label than the typical shoppers in
Leclerc, Cora, Systeme U and Intermarché. This indicates
that these retailers' product offering and communication
of private labels is more successful than Carrefour's
campaign...”

3 Business Insights
Private Label Strategy in Carrefour
Best practice for food, drink and personal care manufacturers
Hot issues covered in this report
2003-4 growth (%)
25
20
15
10
Turkey
Greece
Portugal
Sales data, 2004
Asia
Czech Rep / Slovakia
Spain
5
Poland
Switzerland
Americas
Italy
Belgium
-
0 5000 10000 15000 20000
2004 sales, $m
Source: Private Label Strategy in Carrefour
France
49782
Carrefour's private label strategy is undergoing substantial change
Carrefour's private label strategy is at the forefront of its moves to regain market share.
The discount label, No.1 is being used by the retailer to drive footfall in store and
increase market share. However, market share has not grown as expected and now
Carrefour are comprehensively reviewing their private label strategy this year and their
role as a premium private label and branded retailer.
The key impact of discounting on Carrefour's strategy
The growing presence of discounters has had a key impact on the Carrefour group’s
private label strategy by offering their own private label ranges that price-match or are
cheaper than the discounters. At the same time the group's discount fascias, Dia and
Minipreco, are moving more towards mainstream supermarkets. The Carrefour group
saw decreased PL share in Dia by 0.6 percentage points to 55.7% and by 0.2
percentage points to 43% in Minipreço.
“The Carrefour group grew in sales by 3.1% from 2003
to 2004, worldwide. The growth rate in Carrefour's core
French market was 0.2% from 2003 to 2004 due to a
developed and consolidated nature of the retail sector. It
is likely that Carrefour will look to revitalise sales in their
domestic market. One concept Carrefour has developed
to encourage sales is the roll out of an aggressive pricing
strategy in all hypermarkets with their discount No.1
private label range...”
Carrefour's private label timeline
1998
Destination Saveurs
Risk of losing high value customers
Carrefour has reduced its promotion of premium and branded labels in order to focus
on No.1. However it is vital for Carrefour to continue to promote brands and premium
private labels in order to maintain appeal to high value customers because they are a
higher value retailer. Carrefour's current strategy risks the loss of high value customers
as it continues to focus strongly on discounting.
Eastern Europe as a focus of growth for Carrefour
Carrefour is actively increasing private label and market share in the Czech Republic.
There was no private label share for the Carrefour group in the Czech Republic in
2003. In 2004 there was a rapid development in private label and Carrefour’s share
increased to 2%. In the overall market, the private label share increased from 7% in
2003 to 14% in 2004. Suppliers should find an increasing consumer appetite for private
labels.
Reflets de France
1976 1985 1993
Produit Libres
Produit Carrefour
Filière Qualité
1996
Escapades Gourmandes
Carrefour Bio
1997
Source: Private Label Strategy in Carrefour
2003
No.1
PCI
2004
J’aime
2002
Your questions answered
• How successful is Carrefour's discounting strategy, and how does it vary by country?
• Where are the main opportunities and threats from private label at a category level?
• How will Carrefour’s strategy vary by country, format and fascia?
“It appears as though the main concept of the more
recent discount labels is to bring discount led customers
into the store, and migrate them to the higher value labels.
Carrefour is attempting to convey the price image of a
cheaper store, but remain a high value retailer to its current
high value customers...”
• How is Carrefour implementing both pan European and local sourcing in its private
label assortments?
• What impact will private label have on levels of discounting and brand strategy?

Business Insights
4
Table of contents
Private Label Strategy in Carrefour: Best practice for food, drink and personal care manufacturers
EXECUTIVE SUMMARY
• The Carrefour group strategic overview
• The fascias
• Private label strategy
• Price premium of national brands over private
label
• Private label attractiveness
• Conclusions
CHAPTER 1: THE CARREFOUR GROUP- STRATEGIC
OVERVIEW
• Summary
• Introduction
• Key issues for Carrefour
• Carrefour's global position
- Market share
- Sales growth
• Carrefour's strategy
- Discount strategy
- Communication of price
- Growth of non-food
- Organic growth
- Cost cutting
- Dia
• Slow-down of international expansion
- Plans for expansion and divestment
- Other divestments
• Buying policy
• Marketing and customer loyalty
- Promotion of the discount strategy
- Customer loyalty in Carrefour
- Loyalty as an experience
- The loyalty card
- Competitors loyalty schemes in France
CHAPTER 2: THE FASCIAS
• Summary
• Introduction
• Carrefour hypermarkets
- Private label strategy in the hypermarkets
- Hypermarkets store layout
- Consumer profile
- Private label/branded share by country
- Private label share of sales by country
• Supermarkets
- Champion
- Private label strategy in the supermarkets
- Consumer profile
- Private label/branded share by country
- Private label share of sales by country
• Discount stores
- Dia
- Ed
- Private label strategy in Dia/Ed
- Consumer profile
- Private label/branded share by country
- Private label share of sales by country
• Convenience stores
- Sherpa
- Shopi, 8-à-Huit, Marché Plus and Proxi
• Cash & carry
• New formats
- Small hyper and HyperChampion
- Very urban Champion
- Super discount- Maxi Dia
• Private label share growth in the fascias
• Private label share of sales vs. other retailers
• Private label penetration in France
CHAPTER 3: PRIVATE LABEL STRATEGY
• Summary
• Introduction
• Private label ranges
- Private label ranges
- Filière Qualité Carrefour
- No. 1
- Produits Carrefour
- PCI (Produits Carrefour Internationaux)
- Reflets de France
- Escapades Gourmandes
- Destination Saveurs
- Carrefour Bio
- J'aime
- Non- food private labels
• Case study of Carrefour's private label ranges
- Positioning of Carrefour's private labels relative
to price
- No. 1
- Produit Carrefour
- Reflets de France
- Escapades Gourmandes
- Carrefour Bio
- J'aime

5 Business Insights
Table of contents continued...
Private Label Strategy in Carrefour: Best practice for food, drink and personal care manufacturers
CHAPTER 4: PRICE PREMIUM OF NATIONAL BRANDS
OVER PRIVATE LABEL
• Summary
• Introduction
• Price premium of national brands over private label
• Category specific price premium across countries
- Yogurt
- Beer
- Shampoo
CHAPTER 5: PRIVATE LABEL ATTRACTIVENESS
• Summary
• Introduction
• Carrefour's private label attractiveness in France
• Top 10 private label categories
- France
- Belgium
- Spain
- Portugal
• Private label success
- France
- Spain
- Belgium
- Portugal
• Fast growth private label sectors
CHAPTER 6: CONCLUSIONS
• Summary
• Introduction
- France and Spain
- Belgium and Portugal
• Carrefour's operations
- Emerging markets
- Market share
- Discount threat
• Discount strategy
- Opportunities
- Threats
- Champion
• Premiumisation
• Move away from discounters
• Format strategy
CHAPTER 7: APPENDIX
- Index
LIST OF FIGURES
• Sales by format in France (%), 2003-2004
• Market share of Carrefour in 2003*
• Sales data, 2004
• Sales by category (%), 2003
• Carrefour's global operations
• Reflets de France promotion in a Carrefour magazine
• Filière Qualité Carrefour promotion
• No.1 in store promotion in hypermarkets in France
• Loyalty by country in Carrefour, 2004
• In store signage indicating discounts with the loyalty
card
• Private label strategy in Carrefour hypermarkets
• Features of the Carrefour store layout
• % expenditure of consumers in terms of age of house
wife in Carrefour hypermarkets, 2003
• % expenditure of consumers in terms of household size
in Carrefour hypermarkets, 2003
• Private label share for Carrefour hypermarkets, (%), 2003
• Private label share growth for Carrefour by country,
2002-03
• Champion private label strategy
• % expenditure of consumers in terms of age of house
wife in Carrefour supermarkets, 2003
• % expenditure of consumers in terms of household size
in Carrefour supermarkets, 2003
• Private label share for supermarkets, (%), 2003
• Supermarkets private label share growth vs. the rest of
the market, 2002-03
• Dia, in-store, private label strategy
• % expenditure of consumers in terms of age of house
wife in Carrefour discounters, 2003
• % expenditure of consumers in terms of household size
in Carrefour discounters, 2003
• Private label share for discounters, (%), 2003
• Discounter private label share growth vs. the rest of the
market, 2002-03
• Private label share growth vs. other retailers in France,
2002-2003
• Private label share growth vs. other retailers in Belgium,
2002-2003
• Private label share growth vs. other retailers in Spain,
2002-2003
• Private label share growth vs. other retailers in Portugal,
2002-2003
• Private label share of sales vs other retailers in France,
2003
• Private label share of sales vs other retailers in Belgium,
2003
• Private label share of sales vs other retailers in Spain,
2003
• Private label share of sales vs other retailers in Portugal,
2003

Business Insights
6
Table of contents continued...
Private Label Strategy in Carrefour: Best practice for food, drink and personal care manufacturers
• Number of customer transactions in French
hypermarkets, 2003-2004
• Private label penetration relative to private label share &
market share in France, 2003
• Summary of Carrefour's private labels
• Same product, different label
• Filière Qualité Carrefour in Poland
• No.1 in Czech Republic
• Produit Carrefour
• Positioning of Carrefour's private labels relative to price
in biscuits
• No.1 packaging analysis
• Produit Carrefour packaging analysis
• Reflets de France packaging analysis
• Escapades Gourmandes packaging analysis
• Carrefour Bio packaging analysis
• J'aime packaging analysis
• Branding criteria of Carrefour private labels
• Price premium of national brands over private label in
France
• Comparison of a basket of private label goods
compared to branded equivalents
• Comparison of the price premium of yogurt by country
• Comparison of the price of beer
• Comparison of the price of shampoo
• Carrefour shoppers vs competition: PL attractiveness
• France PL propensity matrix
• Carrefour PL success matrix in France
• Champion PL success matrix in France
• Spain PL propensity matrix
• Carrefour PL success matrix in Spain
• Dia PL success matrix in Spain
• Belgium PL propensity matrix
• Carrefour PL success matrix in Belgium
• Champion PL success matrix in Belgium
• Portugal PL propensity matrix
• Carrefour PL success matrix in Portugal
• Minipreço PL success matrix in Portugal
• Share trend for private label sectors in Carrefour,
2000-03
• Carrefour's operating environment, by core country
• Carrefour's private label timeline
LIST OF TABLES
• The world's leading grocery retailers
• Key financials ($m), 1999-2004
• Sales including VAT per country, ($m), 2004
• Discount retailers in France, 2003
• Sales by product hypermarkets in France (%), 1999-2003
• Sales by region, (%), 1999-2003
• Number of stores worldwide, 2003-2004
• Competitors loyalty schemes in France
• Format data of the Carrefour group 2003-2004
• Total hypermarket stores in France, 1999-2004
• Sales area of hypermarkets in France (m²), 1999-2004
• Carrefour sales performance in France ($m), 1999-2004
• Private label share for Carrefour hypermarkets, (%), 2003
• Carrefour's private label share growth vs. the rest of the
market, 2002-03
• Number of Champion stores in France, 1999-2004
• Size of Champion stores in France, (m²), 1999-2004
• Champion sales performance in France, ($m), 1999-2004
• Supermarkets private label share growth vs. the rest of
the market, 2002-03
• Total Ed stores in France, 1999-2004
• Sales area of Ed stores in France, (m²), 1999-2004
• Ed sales performance in France, ($m), 1999-2004
• Discounter private label share growth vs. the rest of the
market, 2002-03
• Private label penetration relative to private label share &
market share in France, 2003
• Private labels relative to price
• Top 10 private label products in Carrefour
• Share trend for private label sectors in Carrefour,
2000-03
• Key financials for France, ($m), 1999-2004
• Sales by format in France (%), 1999-2004
• Format data for France, 2003-2004
• Number of Carrefour stores by region

7 Business Insights
Sample Information
Chapter 3: Private Label Strategy
Summary of Carrefour's private labels
Brand
Produit Carrefour
No. 1
Reflets de France
Positioning/Sector
Mainstream fascia brand in food and
non-food
Discount products in food and non-food
Food from the various regions of France
Filiére Qualitié Carrefour
Fresh food
Escapades Gourmandes
Gourmet products
Destination Saveurs
Ethnic food
Carrefour Bio
Organic products
Private label ranges
According to the Carrefour group, private labels have a share of
21% in dry grocery sales, national brands have a share of 74%
and fighting brands, which are the cheapest on display, have a
share of 5% in Carrefour hypermarket's dry grocery sales.
Carrefour's private label strategy for 2005 includes ensuring that
its own brands are much more visible on the shelf, and that they
are developing the sub-brands such as Carrefour Bio. The
Carrefour group's private label strategy is to "strengthen its
commercial dynamics." This has resulted in a whole new
repositioning of the various product assortments by price range.
In an interview in LSA magazine in 2004, former CEO Bernard
Dunand, stated that:
J’aime
Firstline
Healthy products
Household appliances
1. No.1 of Prices have to be 6% to 7% cheaper than discount
Topbike
Tex
Bikes
Clothing
2. PCI (Produits Carrefour Internationaux) are to be at discount
prices
Source: Private Label in Carrefour
Bluesky
Electrical Products
3. National Brands have to be less numerous and cheaper than
presently.
Carrefour customers still have many product choices: Bio,
ethnic, ethical, eco-friendly, and regional. Carrefour intends to keep in its stores its entire private label ranges in these segments.
These segments and the discount labels represent the diversification in Carrefour's private label strategy. The strategy consists of
two core themes:
• Discounting
• Premiumisation
The Carrefour group has a vast portfolio of private labels. Apart from the Carrefour own label which offers an alternative to almost
any manufacturer's brand, there is a wide range of specialist ranges, from exotic to local specialities, organic and health food,
no-name discount products and of course the 'Filière Qualité Carrefour' range, which covers hundreds of items in fresh food,
under Carrefour's total control "from the field to the plate." Other lines are:
• Standard or cheap (Produit Carrefour and No.1;
• Labels for organic products (Carrefour Bio);
• Local (Reflets de France);
• International (Destination Saveurs) specialties;
• Delicatessen (Escapades Gourmandes).
• There are also special own brands for the retailer's Cash and Carry and food service operations (Promocash), and a range of
products available for independent retailers (Grand Jury).
The Carrefour group sells private labels in all of the markets it operates in. Produit Carrefour is the same as Produit Champion. The
standard private label is mirrored by corresponding labels, such as "GS" and "GB," in the respective fascias. The rebadging of the
same product by retail fascia show's Carrefour's commitment to a centralised buying process for the Group.

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