Private Label Strategy in Carrefour - Business Insights
Private Label Strategy in Carrefour - Business Insights
Private Label Strategy in Carrefour - Business Insights
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<strong>Private</strong> <strong>Label</strong> <strong>Strategy</strong><br />
<strong>in</strong> <strong>Carrefour</strong><br />
Best practice for food, dr<strong>in</strong>k and personal care manufacturers<br />
<strong>in</strong> association with...<br />
Published August 2005<br />
New Management Report<br />
from<br />
Top 10 private label products <strong>in</strong> <strong>Carrefour</strong>*<br />
France<br />
PL share<br />
%<br />
Belgium<br />
PL share<br />
%<br />
Spa<strong>in</strong><br />
PL share<br />
%<br />
Portugal<br />
PL share<br />
%<br />
1 xxx 63.2 xxx 67.6 xxx 63.6 xxx 38.9<br />
Must have data and<br />
<strong>in</strong>sight for:<br />
2 xxx 62.5 xxx 55 xxx 60.9 xxx 35.8<br />
3 xxx 61 xxx 54.3 xxx 56.7 xxx 35.7<br />
4<br />
Toilet<br />
Tissues<br />
58.2 Jam 30.3 Cook<strong>in</strong>g Oil 55.8<br />
Fabric<br />
Conditioner<br />
34.1<br />
5 xxx 57.1 xxx 27.8 xxx 55.7 xxx 33.8<br />
6<br />
Canned<br />
Tomatoes<br />
57 Cold Meats 27.1<br />
Canned<br />
Fish<br />
48.2<br />
Frozen<br />
Vegetables<br />
7 xxx 56.8 xxx 27 xxx 46.1 xxx 25<br />
8 Fruit Juice 54.3<br />
Bean &<br />
Ground<br />
Coffee<br />
26.2<br />
25.6 Fruit Juice 45.6 Fruit Juice 15.9<br />
9 xxx 50.2 xxx 24.6 xxx 39.9 xxx 14.7<br />
1.<br />
Companies supply<strong>in</strong>g FMCG<br />
brands to <strong>Carrefour</strong><br />
10 Fresh Pasta 49.5 Rice 24.1 Ice Cream 34.8<br />
Difference<br />
between top<br />
and tenth<br />
product<br />
Still M<strong>in</strong>eral<br />
Water<br />
12.2<br />
13.7 43.5 28.8 26.7<br />
Source: <strong>Private</strong> <strong>Label</strong> <strong>Strategy</strong> <strong>in</strong> <strong>Carrefour</strong>:<br />
Best practice for food, dr<strong>in</strong>k and personal care manufacturers<br />
* The complete table reveal<strong>in</strong>g the top 10 private label products <strong>in</strong> <strong>Carrefour</strong> is<br />
available <strong>in</strong> the report<br />
2.<br />
<strong>Private</strong> label companies<br />
supply<strong>in</strong>g FMCG products<br />
to <strong>Carrefour</strong><br />
“Top private label products are commoditized products, apart from <strong>in</strong> Belgium, which has a<br />
much weaker private label sector for <strong>Carrefour</strong> hypermarkets. Canned foods are top of the<br />
private label share list, apparent <strong>in</strong> France, Belgium and Spa<strong>in</strong>, and always with a high share of<br />
total sales taken by the private label version. Canned tomatoes <strong>in</strong> particular, have appeared <strong>in</strong><br />
each list...”<br />
Source: <strong>Private</strong> <strong>Label</strong> <strong>Strategy</strong> <strong>in</strong> <strong>Carrefour</strong><br />
3.<br />
Companies look<strong>in</strong>g to<br />
establish a supplier<br />
relationship with <strong>Carrefour</strong><br />
Identify<strong>in</strong>g the major growth opportunities <strong>in</strong><br />
your food, dr<strong>in</strong>k, personal care and household<br />
care products...<br />
This is the def<strong>in</strong>itive report<br />
on <strong>Carrefour</strong>’s private label<br />
strategy.
1 Bus<strong>in</strong>ess <strong>Insights</strong><br />
<strong>Private</strong> <strong>Label</strong> <strong>Strategy</strong> <strong>in</strong> <strong>Carrefour</strong><br />
Best practice for food, dr<strong>in</strong>k and personal care manufacturers<br />
What our clients say...<br />
“I found the report to be most<br />
useful, perhaps because it provided<br />
an overview from different category<br />
perspectives. I felt that the report<br />
benefited from the consultant<br />
approach and offered orig<strong>in</strong>al and<br />
considered th<strong>in</strong>k<strong>in</strong>g, rather than the<br />
'shot <strong>in</strong> the dark', naive approach I<br />
have seen <strong>in</strong> other reports...”<br />
Bus<strong>in</strong>ess Development Director<br />
Kraft Foods<br />
This new report provides exclusive gold standard data<br />
from AiMark and Europanel (from GfK and TNS) as<br />
well as trusted analysis from established private label<br />
experts from Bus<strong>in</strong>ess <strong>Insights</strong>.<br />
<strong>Carrefour</strong> is the world’s second largest retailer with a diverse range of private labels. Its<br />
presence <strong>in</strong> 31 countries gives this new management report a huge breadth of coverage<br />
with <strong>in</strong>-depth private label data analysed <strong>in</strong> eight of the <strong>Carrefour</strong> group’s core European<br />
markets.<br />
Bus<strong>in</strong>ess <strong>Insights</strong> has teamed up with Europanel (from GfK and TNS) and AIMARK to br<strong>in</strong>g<br />
you this brand NEW unique report, <strong>Private</strong> <strong>Label</strong> <strong>Strategy</strong> <strong>in</strong> <strong>Carrefour</strong>: Best practice<br />
for food, dr<strong>in</strong>k and personal care manufacturers. This new report provides data for all<br />
the formats that the <strong>Carrefour</strong> group operate, <strong>in</strong>clud<strong>in</strong>g their discount stores - the ma<strong>in</strong><br />
driver for the growth <strong>in</strong> private label. The report is written for food, dr<strong>in</strong>k, personal<br />
care and household care manufacturers enabl<strong>in</strong>g you to ga<strong>in</strong> a unique <strong>in</strong>sight <strong>in</strong>to<br />
successful and unsuccessful food, dr<strong>in</strong>k, personal care and household care categories <strong>in</strong><br />
the <strong>Carrefour</strong> group reveal<strong>in</strong>g the threats and opportunities that you may face.<br />
Unique <strong>in</strong>formation from a panel of 178,000<br />
households analysed by private label experts<br />
The data and analysis <strong>in</strong> this report is based on consumer panels of Europanel<br />
(from GfK and TNS), used to derive exclusive <strong>in</strong>formation on category sizes, brand and<br />
private label market size, share and pric<strong>in</strong>g, retailer shares, household penetration and<br />
frequency of purchase.<br />
Price premium of national brands over<br />
private label <strong>in</strong> France<br />
With research and analysis conducted through 2004 and 2005, this report<br />
<strong>in</strong>corporates data from a survey of 25,000 consumers and a panel of 178,000<br />
households.<br />
Price Index branded/PL<br />
240<br />
220<br />
200<br />
180<br />
160<br />
140<br />
120<br />
100<br />
Yogurts<br />
All retailers<br />
<strong>Carrefour</strong><br />
Champion<br />
Sweet Biscuits<br />
Pasta<br />
Mayonnaise<br />
Margar<strong>in</strong>e & Spreads<br />
Instant Coffee<br />
Fruit juice<br />
Colas<br />
Beer<br />
Still M<strong>in</strong>eral Water<br />
Sanitary Protection – Pads<br />
Shampoo<br />
<strong>Private</strong> <strong>Label</strong> <strong>in</strong> <strong>Carrefour</strong> - know your market<br />
The report provides:<br />
• Case studies of <strong>Carrefour</strong>’s private label ranges reveal<strong>in</strong>g their label<strong>in</strong>g, position<strong>in</strong>g<br />
and quality strategies.<br />
• Analysis of brand vulnerability and the price premium of national brands over<br />
private label <strong>in</strong> <strong>Carrefour</strong>.<br />
Source: <strong>Private</strong> <strong>Label</strong> <strong>Strategy</strong> <strong>in</strong> <strong>Carrefour</strong><br />
“The product with the biggest difference <strong>in</strong> price<br />
between branded and private label <strong>in</strong> <strong>Carrefour</strong><br />
hypermarkets is colas. Branded colas are over twice as<br />
expensive as <strong>Carrefour</strong>'s private label colas.<br />
Consumers have an attachment to the two lead<strong>in</strong>g<br />
brands, Coca-Cola or Pepsi...”<br />
• Unique data on the private label share analys<strong>in</strong>g penetration, growth and success<br />
<strong>in</strong> the <strong>Carrefour</strong> group <strong>in</strong> France, Belgium, Spa<strong>in</strong>, Portugal, Czech Republic, Italy,<br />
Poland and Switzerland.<br />
• A breakdown of <strong>Carrefour</strong>’s private label strategy <strong>in</strong> each of its formats across<br />
europe.
Bus<strong>in</strong>ess <strong>Insights</strong><br />
2<br />
<strong>Private</strong> <strong>Label</strong> <strong>Strategy</strong> <strong>in</strong> <strong>Carrefour</strong><br />
Best practice for food, dr<strong>in</strong>k and personal care manufacturers<br />
Key f<strong>in</strong>d<strong>in</strong>gs of this new report<br />
• In Portugal, <strong>Carrefour</strong> hypermarket’s share of private label sales are below<br />
market average. A large number of <strong>Carrefour</strong>’s customers <strong>in</strong> Portugal are over<br />
65. At this age, the consumer no longer has large families to provide for and<br />
therefore it is likely the discount concept of sav<strong>in</strong>g on cheaper private labels are<br />
not as important to them. <strong>Private</strong> label share is driven by M<strong>in</strong>ipreço where 43%<br />
of turnover is <strong>in</strong> this sector.<br />
• Overall, the fastest growth private label sector for <strong>Carrefour</strong> hypermarkets<br />
is household care products. In Portugal, <strong>Carrefour</strong> has experienced the most<br />
growth <strong>in</strong> this private label sector with a growth of 8.7% from 2000 to 2003.<br />
• In 2004, 38% of turnover <strong>in</strong> <strong>Carrefour</strong> hypermarkets was <strong>in</strong> non-food<br />
products. Therefore the <strong>Carrefour</strong> group are develop<strong>in</strong>g their non-food range <strong>in</strong><br />
the hypermarkets and supermarkets, worldwide.<br />
• In 2005, private labels had a share of 21% <strong>in</strong> dry grocery sales, national<br />
brands have a share of 74% and fight<strong>in</strong>g brands, which are the cheapest on<br />
display, have a share of 5% <strong>in</strong> <strong>Carrefour</strong>’s dry grocery sales.<br />
• <strong>Carrefour</strong>’s discount strategy carries a number of <strong>in</strong>herent risks, which<br />
<strong>in</strong>clude switch<strong>in</strong>g customers from higher value to lower value private labels or<br />
from brands to private labels. Consumers will be trad<strong>in</strong>g down and may no<br />
longer see the value <strong>in</strong> premium products.<br />
Position<strong>in</strong>g of <strong>Carrefour</strong>'s private labels relative to<br />
price <strong>in</strong> biscuits<br />
Higher price<br />
Healthy<br />
<strong>Carrefour</strong><br />
Bio<br />
J’aime<br />
No.1<br />
Produits<br />
<strong>Carrefour</strong><br />
Discount<br />
Source: <strong>Private</strong> <strong>Label</strong> <strong>Strategy</strong> <strong>in</strong> <strong>Carrefour</strong><br />
Escapades<br />
Gourmandes<br />
Reflets<br />
de<br />
France<br />
Gourmet<br />
“Produit <strong>Carrefour</strong> is the standard label analysed. The<br />
biscuits are 37% more expensive than No.1 at €0.52 per<br />
100g. Although not a gourmet product, the Produit<br />
<strong>Carrefour</strong> chocolate biscuits are priced identically to<br />
the premium positioned Reflets de France product. The<br />
price premium over No.1 also places the Produit<br />
<strong>Carrefour</strong> product as a standard/gourmet consumer<br />
product (everyday <strong>in</strong>dulgence)...”<br />
<strong>Carrefour</strong> shoppers vs competition: PL attractiveness<br />
-0.4 -0.3<br />
-0.2 -0.1 0 0.1<br />
0.2 0.3 0.4<br />
Actionable strategies to drive profit growth<br />
High Brand<br />
Trust and<br />
Price-Quality<br />
Inference<br />
ATAC<br />
CORA<br />
GEANT<br />
• Increase your market share by identify<strong>in</strong>g where the major growth<br />
opportunities lie <strong>in</strong> your food, dr<strong>in</strong>k, personal care and household care<br />
products by analys<strong>in</strong>g the success of private label categories, top 10 private<br />
label categories and the fast growth private label sectors <strong>in</strong> the 4 core markets of<br />
France, Spa<strong>in</strong>, Belgium and Portugal.<br />
SYSTEME U<br />
CHAMPION<br />
AUCHAN<br />
INTERMARCHE<br />
CARREFOUR<br />
Below average<br />
LECLERC<br />
Above average<br />
• Maximise your profit by analys<strong>in</strong>g the sectors where there are large<br />
premiums on branded products and uncover the price premium of national<br />
brands over private labels.<br />
• Discover whether <strong>Carrefour</strong>’s private label strategy will affect your brand<br />
sales by identify<strong>in</strong>g their short and long term strategies.<br />
Source: <strong>Private</strong> <strong>Label</strong> <strong>Strategy</strong> <strong>in</strong> <strong>Carrefour</strong><br />
“The typical shoppers <strong>in</strong> <strong>Carrefour</strong> and Champion are less<br />
<strong>in</strong>cl<strong>in</strong>ed to buy private label than the typical shoppers <strong>in</strong><br />
Leclerc, Cora, Systeme U and Intermarché. This <strong>in</strong>dicates<br />
that these retailers' product offer<strong>in</strong>g and communication<br />
of private labels is more successful than <strong>Carrefour</strong>'s<br />
campaign...”
3 Bus<strong>in</strong>ess <strong>Insights</strong><br />
<strong>Private</strong> <strong>Label</strong> <strong>Strategy</strong> <strong>in</strong> <strong>Carrefour</strong><br />
Best practice for food, dr<strong>in</strong>k and personal care manufacturers<br />
Hot issues covered <strong>in</strong> this report<br />
2003-4 growth (%)<br />
25<br />
20<br />
15<br />
10<br />
Turkey<br />
Greece<br />
Portugal<br />
Sales data, 2004<br />
Asia<br />
Czech Rep / Slovakia<br />
Spa<strong>in</strong><br />
5<br />
Poland<br />
Switzerland<br />
Americas<br />
Italy<br />
Belgium<br />
-<br />
0 5000 10000 15000 20000<br />
2004 sales, $m<br />
Source: <strong>Private</strong> <strong>Label</strong> <strong>Strategy</strong> <strong>in</strong> <strong>Carrefour</strong><br />
France<br />
49782<br />
<strong>Carrefour</strong>'s private label strategy is undergo<strong>in</strong>g substantial change<br />
<strong>Carrefour</strong>'s private label strategy is at the forefront of its moves to rega<strong>in</strong> market share.<br />
The discount label, No.1 is be<strong>in</strong>g used by the retailer to drive footfall <strong>in</strong> store and<br />
<strong>in</strong>crease market share. However, market share has not grown as expected and now<br />
<strong>Carrefour</strong> are comprehensively review<strong>in</strong>g their private label strategy this year and their<br />
role as a premium private label and branded retailer.<br />
The key impact of discount<strong>in</strong>g on <strong>Carrefour</strong>'s strategy<br />
The grow<strong>in</strong>g presence of discounters has had a key impact on the <strong>Carrefour</strong> group’s<br />
private label strategy by offer<strong>in</strong>g their own private label ranges that price-match or are<br />
cheaper than the discounters. At the same time the group's discount fascias, Dia and<br />
M<strong>in</strong>ipreco, are mov<strong>in</strong>g more towards ma<strong>in</strong>stream supermarkets. The <strong>Carrefour</strong> group<br />
saw decreased PL share <strong>in</strong> Dia by 0.6 percentage po<strong>in</strong>ts to 55.7% and by 0.2<br />
percentage po<strong>in</strong>ts to 43% <strong>in</strong> M<strong>in</strong>ipreço.<br />
“The <strong>Carrefour</strong> group grew <strong>in</strong> sales by 3.1% from 2003<br />
to 2004, worldwide. The growth rate <strong>in</strong> <strong>Carrefour</strong>'s core<br />
French market was 0.2% from 2003 to 2004 due to a<br />
developed and consolidated nature of the retail sector. It<br />
is likely that <strong>Carrefour</strong> will look to revitalise sales <strong>in</strong> their<br />
domestic market. One concept <strong>Carrefour</strong> has developed<br />
to encourage sales is the roll out of an aggressive pric<strong>in</strong>g<br />
strategy <strong>in</strong> all hypermarkets with their discount No.1<br />
private label range...”<br />
<strong>Carrefour</strong>'s private label timel<strong>in</strong>e<br />
1998<br />
Dest<strong>in</strong>ation Saveurs<br />
Risk of los<strong>in</strong>g high value customers<br />
<strong>Carrefour</strong> has reduced its promotion of premium and branded labels <strong>in</strong> order to focus<br />
on No.1. However it is vital for <strong>Carrefour</strong> to cont<strong>in</strong>ue to promote brands and premium<br />
private labels <strong>in</strong> order to ma<strong>in</strong>ta<strong>in</strong> appeal to high value customers because they are a<br />
higher value retailer. <strong>Carrefour</strong>'s current strategy risks the loss of high value customers<br />
as it cont<strong>in</strong>ues to focus strongly on discount<strong>in</strong>g.<br />
Eastern Europe as a focus of growth for <strong>Carrefour</strong><br />
<strong>Carrefour</strong> is actively <strong>in</strong>creas<strong>in</strong>g private label and market share <strong>in</strong> the Czech Republic.<br />
There was no private label share for the <strong>Carrefour</strong> group <strong>in</strong> the Czech Republic <strong>in</strong><br />
2003. In 2004 there was a rapid development <strong>in</strong> private label and <strong>Carrefour</strong>’s share<br />
<strong>in</strong>creased to 2%. In the overall market, the private label share <strong>in</strong>creased from 7% <strong>in</strong><br />
2003 to 14% <strong>in</strong> 2004. Suppliers should f<strong>in</strong>d an <strong>in</strong>creas<strong>in</strong>g consumer appetite for private<br />
labels.<br />
Reflets de France<br />
1976 1985 1993<br />
Produit Libres<br />
Produit <strong>Carrefour</strong><br />
Filière Qualité<br />
1996<br />
Escapades Gourmandes<br />
<strong>Carrefour</strong> Bio<br />
1997<br />
Source: <strong>Private</strong> <strong>Label</strong> <strong>Strategy</strong> <strong>in</strong> <strong>Carrefour</strong><br />
2003<br />
No.1<br />
PCI<br />
2004<br />
J’aime<br />
2002<br />
Your questions answered<br />
• How successful is <strong>Carrefour</strong>'s discount<strong>in</strong>g strategy, and how does it vary by country?<br />
• Where are the ma<strong>in</strong> opportunities and threats from private label at a category level?<br />
• How will <strong>Carrefour</strong>’s strategy vary by country, format and fascia?<br />
“It appears as though the ma<strong>in</strong> concept of the more<br />
recent discount labels is to br<strong>in</strong>g discount led customers<br />
<strong>in</strong>to the store, and migrate them to the higher value labels.<br />
<strong>Carrefour</strong> is attempt<strong>in</strong>g to convey the price image of a<br />
cheaper store, but rema<strong>in</strong> a high value retailer to its current<br />
high value customers...”<br />
• How is <strong>Carrefour</strong> implement<strong>in</strong>g both pan European and local sourc<strong>in</strong>g <strong>in</strong> its private<br />
label assortments?<br />
• What impact will private label have on levels of discount<strong>in</strong>g and brand strategy?
Bus<strong>in</strong>ess <strong>Insights</strong><br />
4<br />
Table of contents<br />
<strong>Private</strong> <strong>Label</strong> <strong>Strategy</strong> <strong>in</strong> <strong>Carrefour</strong>: Best practice for food, dr<strong>in</strong>k and personal care manufacturers<br />
EXECUTIVE SUMMARY<br />
• The <strong>Carrefour</strong> group strategic overview<br />
• The fascias<br />
• <strong>Private</strong> label strategy<br />
• Price premium of national brands over private<br />
label<br />
• <strong>Private</strong> label attractiveness<br />
• Conclusions<br />
CHAPTER 1: THE CARREFOUR GROUP- STRATEGIC<br />
OVERVIEW<br />
• Summary<br />
• Introduction<br />
• Key issues for <strong>Carrefour</strong><br />
• <strong>Carrefour</strong>'s global position<br />
- Market share<br />
- Sales growth<br />
• <strong>Carrefour</strong>'s strategy<br />
- Discount strategy<br />
- Communication of price<br />
- Growth of non-food<br />
- Organic growth<br />
- Cost cutt<strong>in</strong>g<br />
- Dia<br />
• Slow-down of <strong>in</strong>ternational expansion<br />
- Plans for expansion and divestment<br />
- Other divestments<br />
• Buy<strong>in</strong>g policy<br />
• Market<strong>in</strong>g and customer loyalty<br />
- Promotion of the discount strategy<br />
- Customer loyalty <strong>in</strong> <strong>Carrefour</strong><br />
- Loyalty as an experience<br />
- The loyalty card<br />
- Competitors loyalty schemes <strong>in</strong> France<br />
CHAPTER 2: THE FASCIAS<br />
• Summary<br />
• Introduction<br />
• <strong>Carrefour</strong> hypermarkets<br />
- <strong>Private</strong> label strategy <strong>in</strong> the hypermarkets<br />
- Hypermarkets store layout<br />
- Consumer profile<br />
- <strong>Private</strong> label/branded share by country<br />
- <strong>Private</strong> label share of sales by country<br />
• Supermarkets<br />
- Champion<br />
- <strong>Private</strong> label strategy <strong>in</strong> the supermarkets<br />
- Consumer profile<br />
- <strong>Private</strong> label/branded share by country<br />
- <strong>Private</strong> label share of sales by country<br />
• Discount stores<br />
- Dia<br />
- Ed<br />
- <strong>Private</strong> label strategy <strong>in</strong> Dia/Ed<br />
- Consumer profile<br />
- <strong>Private</strong> label/branded share by country<br />
- <strong>Private</strong> label share of sales by country<br />
• Convenience stores<br />
- Sherpa<br />
- Shopi, 8-à-Huit, Marché Plus and Proxi<br />
• Cash & carry<br />
• New formats<br />
- Small hyper and HyperChampion<br />
- Very urban Champion<br />
- Super discount- Maxi Dia<br />
• <strong>Private</strong> label share growth <strong>in</strong> the fascias<br />
• <strong>Private</strong> label share of sales vs. other retailers<br />
• <strong>Private</strong> label penetration <strong>in</strong> France<br />
CHAPTER 3: PRIVATE LABEL STRATEGY<br />
• Summary<br />
• Introduction<br />
• <strong>Private</strong> label ranges<br />
- <strong>Private</strong> label ranges<br />
- Filière Qualité <strong>Carrefour</strong><br />
- No. 1<br />
- Produits <strong>Carrefour</strong><br />
- PCI (Produits <strong>Carrefour</strong> Internationaux)<br />
- Reflets de France<br />
- Escapades Gourmandes<br />
- Dest<strong>in</strong>ation Saveurs<br />
- <strong>Carrefour</strong> Bio<br />
- J'aime<br />
- Non- food private labels<br />
• Case study of <strong>Carrefour</strong>'s private label ranges<br />
- Position<strong>in</strong>g of <strong>Carrefour</strong>'s private labels relative<br />
to price<br />
- No. 1<br />
- Produit <strong>Carrefour</strong><br />
- Reflets de France<br />
- Escapades Gourmandes<br />
- <strong>Carrefour</strong> Bio<br />
- J'aime
5 Bus<strong>in</strong>ess <strong>Insights</strong><br />
Table of contents cont<strong>in</strong>ued...<br />
<strong>Private</strong> <strong>Label</strong> <strong>Strategy</strong> <strong>in</strong> <strong>Carrefour</strong>: Best practice for food, dr<strong>in</strong>k and personal care manufacturers<br />
CHAPTER 4: PRICE PREMIUM OF NATIONAL BRANDS<br />
OVER PRIVATE LABEL<br />
• Summary<br />
• Introduction<br />
• Price premium of national brands over private label<br />
• Category specific price premium across countries<br />
- Yogurt<br />
- Beer<br />
- Shampoo<br />
CHAPTER 5: PRIVATE LABEL ATTRACTIVENESS<br />
• Summary<br />
• Introduction<br />
• <strong>Carrefour</strong>'s private label attractiveness <strong>in</strong> France<br />
• Top 10 private label categories<br />
- France<br />
- Belgium<br />
- Spa<strong>in</strong><br />
- Portugal<br />
• <strong>Private</strong> label success<br />
- France<br />
- Spa<strong>in</strong><br />
- Belgium<br />
- Portugal<br />
• Fast growth private label sectors<br />
CHAPTER 6: CONCLUSIONS<br />
• Summary<br />
• Introduction<br />
- France and Spa<strong>in</strong><br />
- Belgium and Portugal<br />
• <strong>Carrefour</strong>'s operations<br />
- Emerg<strong>in</strong>g markets<br />
- Market share<br />
- Discount threat<br />
• Discount strategy<br />
- Opportunities<br />
- Threats<br />
- Champion<br />
• Premiumisation<br />
• Move away from discounters<br />
• Format strategy<br />
CHAPTER 7: APPENDIX<br />
- Index<br />
LIST OF FIGURES<br />
• Sales by format <strong>in</strong> France (%), 2003-2004<br />
• Market share of <strong>Carrefour</strong> <strong>in</strong> 2003*<br />
• Sales data, 2004<br />
• Sales by category (%), 2003<br />
• <strong>Carrefour</strong>'s global operations<br />
• Reflets de France promotion <strong>in</strong> a <strong>Carrefour</strong> magaz<strong>in</strong>e<br />
• Filière Qualité <strong>Carrefour</strong> promotion<br />
• No.1 <strong>in</strong> store promotion <strong>in</strong> hypermarkets <strong>in</strong> France<br />
• Loyalty by country <strong>in</strong> <strong>Carrefour</strong>, 2004<br />
• In store signage <strong>in</strong>dicat<strong>in</strong>g discounts with the loyalty<br />
card<br />
• <strong>Private</strong> label strategy <strong>in</strong> <strong>Carrefour</strong> hypermarkets<br />
• Features of the <strong>Carrefour</strong> store layout<br />
• % expenditure of consumers <strong>in</strong> terms of age of house<br />
wife <strong>in</strong> <strong>Carrefour</strong> hypermarkets, 2003<br />
• % expenditure of consumers <strong>in</strong> terms of household size<br />
<strong>in</strong> <strong>Carrefour</strong> hypermarkets, 2003<br />
• <strong>Private</strong> label share for <strong>Carrefour</strong> hypermarkets, (%), 2003<br />
• <strong>Private</strong> label share growth for <strong>Carrefour</strong> by country,<br />
2002-03<br />
• Champion private label strategy<br />
• % expenditure of consumers <strong>in</strong> terms of age of house<br />
wife <strong>in</strong> <strong>Carrefour</strong> supermarkets, 2003<br />
• % expenditure of consumers <strong>in</strong> terms of household size<br />
<strong>in</strong> <strong>Carrefour</strong> supermarkets, 2003<br />
• <strong>Private</strong> label share for supermarkets, (%), 2003<br />
• Supermarkets private label share growth vs. the rest of<br />
the market, 2002-03<br />
• Dia, <strong>in</strong>-store, private label strategy<br />
• % expenditure of consumers <strong>in</strong> terms of age of house<br />
wife <strong>in</strong> <strong>Carrefour</strong> discounters, 2003<br />
• % expenditure of consumers <strong>in</strong> terms of household size<br />
<strong>in</strong> <strong>Carrefour</strong> discounters, 2003<br />
• <strong>Private</strong> label share for discounters, (%), 2003<br />
• Discounter private label share growth vs. the rest of the<br />
market, 2002-03<br />
• <strong>Private</strong> label share growth vs. other retailers <strong>in</strong> France,<br />
2002-2003<br />
• <strong>Private</strong> label share growth vs. other retailers <strong>in</strong> Belgium,<br />
2002-2003<br />
• <strong>Private</strong> label share growth vs. other retailers <strong>in</strong> Spa<strong>in</strong>,<br />
2002-2003<br />
• <strong>Private</strong> label share growth vs. other retailers <strong>in</strong> Portugal,<br />
2002-2003<br />
• <strong>Private</strong> label share of sales vs other retailers <strong>in</strong> France,<br />
2003<br />
• <strong>Private</strong> label share of sales vs other retailers <strong>in</strong> Belgium,<br />
2003<br />
• <strong>Private</strong> label share of sales vs other retailers <strong>in</strong> Spa<strong>in</strong>,<br />
2003<br />
• <strong>Private</strong> label share of sales vs other retailers <strong>in</strong> Portugal,<br />
2003
Bus<strong>in</strong>ess <strong>Insights</strong><br />
6<br />
Table of contents cont<strong>in</strong>ued...<br />
<strong>Private</strong> <strong>Label</strong> <strong>Strategy</strong> <strong>in</strong> <strong>Carrefour</strong>: Best practice for food, dr<strong>in</strong>k and personal care manufacturers<br />
• Number of customer transactions <strong>in</strong> French<br />
hypermarkets, 2003-2004<br />
• <strong>Private</strong> label penetration relative to private label share &<br />
market share <strong>in</strong> France, 2003<br />
• Summary of <strong>Carrefour</strong>'s private labels<br />
• Same product, different label<br />
• Filière Qualité <strong>Carrefour</strong> <strong>in</strong> Poland<br />
• No.1 <strong>in</strong> Czech Republic<br />
• Produit <strong>Carrefour</strong><br />
• Position<strong>in</strong>g of <strong>Carrefour</strong>'s private labels relative to price<br />
<strong>in</strong> biscuits<br />
• No.1 packag<strong>in</strong>g analysis<br />
• Produit <strong>Carrefour</strong> packag<strong>in</strong>g analysis<br />
• Reflets de France packag<strong>in</strong>g analysis<br />
• Escapades Gourmandes packag<strong>in</strong>g analysis<br />
• <strong>Carrefour</strong> Bio packag<strong>in</strong>g analysis<br />
• J'aime packag<strong>in</strong>g analysis<br />
• Brand<strong>in</strong>g criteria of <strong>Carrefour</strong> private labels<br />
• Price premium of national brands over private label <strong>in</strong><br />
France<br />
• Comparison of a basket of private label goods<br />
compared to branded equivalents<br />
• Comparison of the price premium of yogurt by country<br />
• Comparison of the price of beer<br />
• Comparison of the price of shampoo<br />
• <strong>Carrefour</strong> shoppers vs competition: PL attractiveness<br />
• France PL propensity matrix<br />
• <strong>Carrefour</strong> PL success matrix <strong>in</strong> France<br />
• Champion PL success matrix <strong>in</strong> France<br />
• Spa<strong>in</strong> PL propensity matrix<br />
• <strong>Carrefour</strong> PL success matrix <strong>in</strong> Spa<strong>in</strong><br />
• Dia PL success matrix <strong>in</strong> Spa<strong>in</strong><br />
• Belgium PL propensity matrix<br />
• <strong>Carrefour</strong> PL success matrix <strong>in</strong> Belgium<br />
• Champion PL success matrix <strong>in</strong> Belgium<br />
• Portugal PL propensity matrix<br />
• <strong>Carrefour</strong> PL success matrix <strong>in</strong> Portugal<br />
• M<strong>in</strong>ipreço PL success matrix <strong>in</strong> Portugal<br />
• Share trend for private label sectors <strong>in</strong> <strong>Carrefour</strong>,<br />
2000-03<br />
• <strong>Carrefour</strong>'s operat<strong>in</strong>g environment, by core country<br />
• <strong>Carrefour</strong>'s private label timel<strong>in</strong>e<br />
LIST OF TABLES<br />
• The world's lead<strong>in</strong>g grocery retailers<br />
• Key f<strong>in</strong>ancials ($m), 1999-2004<br />
• Sales <strong>in</strong>clud<strong>in</strong>g VAT per country, ($m), 2004<br />
• Discount retailers <strong>in</strong> France, 2003<br />
• Sales by product hypermarkets <strong>in</strong> France (%), 1999-2003<br />
• Sales by region, (%), 1999-2003<br />
• Number of stores worldwide, 2003-2004<br />
• Competitors loyalty schemes <strong>in</strong> France<br />
• Format data of the <strong>Carrefour</strong> group 2003-2004<br />
• Total hypermarket stores <strong>in</strong> France, 1999-2004<br />
• Sales area of hypermarkets <strong>in</strong> France (m²), 1999-2004<br />
• <strong>Carrefour</strong> sales performance <strong>in</strong> France ($m), 1999-2004<br />
• <strong>Private</strong> label share for <strong>Carrefour</strong> hypermarkets, (%), 2003<br />
• <strong>Carrefour</strong>'s private label share growth vs. the rest of the<br />
market, 2002-03<br />
• Number of Champion stores <strong>in</strong> France, 1999-2004<br />
• Size of Champion stores <strong>in</strong> France, (m²), 1999-2004<br />
• Champion sales performance <strong>in</strong> France, ($m), 1999-2004<br />
• Supermarkets private label share growth vs. the rest of<br />
the market, 2002-03<br />
• Total Ed stores <strong>in</strong> France, 1999-2004<br />
• Sales area of Ed stores <strong>in</strong> France, (m²), 1999-2004<br />
• Ed sales performance <strong>in</strong> France, ($m), 1999-2004<br />
• Discounter private label share growth vs. the rest of the<br />
market, 2002-03<br />
• <strong>Private</strong> label penetration relative to private label share &<br />
market share <strong>in</strong> France, 2003<br />
• <strong>Private</strong> labels relative to price<br />
• Top 10 private label products <strong>in</strong> <strong>Carrefour</strong><br />
• Share trend for private label sectors <strong>in</strong> <strong>Carrefour</strong>,<br />
2000-03<br />
• Key f<strong>in</strong>ancials for France, ($m), 1999-2004<br />
• Sales by format <strong>in</strong> France (%), 1999-2004<br />
• Format data for France, 2003-2004<br />
• Number of <strong>Carrefour</strong> stores by region
7 Bus<strong>in</strong>ess <strong>Insights</strong><br />
Sample Information<br />
Chapter 3: <strong>Private</strong> <strong>Label</strong> <strong>Strategy</strong><br />
Summary of <strong>Carrefour</strong>'s private labels<br />
Brand<br />
Produit <strong>Carrefour</strong><br />
No. 1<br />
Reflets de France<br />
Position<strong>in</strong>g/Sector<br />
Ma<strong>in</strong>stream fascia brand <strong>in</strong> food and<br />
non-food<br />
Discount products <strong>in</strong> food and non-food<br />
Food from the various regions of France<br />
Filiére Qualitié <strong>Carrefour</strong><br />
Fresh food<br />
Escapades Gourmandes<br />
Gourmet products<br />
Dest<strong>in</strong>ation Saveurs<br />
Ethnic food<br />
<strong>Carrefour</strong> Bio<br />
Organic products<br />
<strong>Private</strong> label ranges<br />
Accord<strong>in</strong>g to the <strong>Carrefour</strong> group, private labels have a share of<br />
21% <strong>in</strong> dry grocery sales, national brands have a share of 74%<br />
and fight<strong>in</strong>g brands, which are the cheapest on display, have a<br />
share of 5% <strong>in</strong> <strong>Carrefour</strong> hypermarket's dry grocery sales.<br />
<strong>Carrefour</strong>'s private label strategy for 2005 <strong>in</strong>cludes ensur<strong>in</strong>g that<br />
its own brands are much more visible on the shelf, and that they<br />
are develop<strong>in</strong>g the sub-brands such as <strong>Carrefour</strong> Bio. The<br />
<strong>Carrefour</strong> group's private label strategy is to "strengthen its<br />
commercial dynamics." This has resulted <strong>in</strong> a whole new<br />
reposition<strong>in</strong>g of the various product assortments by price range.<br />
In an <strong>in</strong>terview <strong>in</strong> LSA magaz<strong>in</strong>e <strong>in</strong> 2004, former CEO Bernard<br />
Dunand, stated that:<br />
J’aime<br />
Firstl<strong>in</strong>e<br />
Healthy products<br />
Household appliances<br />
1. No.1 of Prices have to be 6% to 7% cheaper than discount<br />
Topbike<br />
Tex<br />
Bikes<br />
Cloth<strong>in</strong>g<br />
2. PCI (Produits <strong>Carrefour</strong> Internationaux) are to be at discount<br />
prices<br />
Source: <strong>Private</strong> <strong>Label</strong> <strong>in</strong> <strong>Carrefour</strong><br />
Bluesky<br />
Electrical Products<br />
3. National Brands have to be less numerous and cheaper than<br />
presently.<br />
<strong>Carrefour</strong> customers still have many product choices: Bio,<br />
ethnic, ethical, eco-friendly, and regional. <strong>Carrefour</strong> <strong>in</strong>tends to keep <strong>in</strong> its stores its entire private label ranges <strong>in</strong> these segments.<br />
These segments and the discount labels represent the diversification <strong>in</strong> <strong>Carrefour</strong>'s private label strategy. The strategy consists of<br />
two core themes:<br />
• Discount<strong>in</strong>g<br />
• Premiumisation<br />
The <strong>Carrefour</strong> group has a vast portfolio of private labels. Apart from the <strong>Carrefour</strong> own label which offers an alternative to almost<br />
any manufacturer's brand, there is a wide range of specialist ranges, from exotic to local specialities, organic and health food,<br />
no-name discount products and of course the 'Filière Qualité <strong>Carrefour</strong>' range, which covers hundreds of items <strong>in</strong> fresh food,<br />
under <strong>Carrefour</strong>'s total control "from the field to the plate." Other l<strong>in</strong>es are:<br />
• Standard or cheap (Produit <strong>Carrefour</strong> and No.1;<br />
• <strong>Label</strong>s for organic products (<strong>Carrefour</strong> Bio);<br />
• Local (Reflets de France);<br />
• International (Dest<strong>in</strong>ation Saveurs) specialties;<br />
• Delicatessen (Escapades Gourmandes).<br />
• There are also special own brands for the retailer's Cash and Carry and food service operations (Promocash), and a range of<br />
products available for <strong>in</strong>dependent retailers (Grand Jury).<br />
The <strong>Carrefour</strong> group sells private labels <strong>in</strong> all of the markets it operates <strong>in</strong>. Produit <strong>Carrefour</strong> is the same as Produit Champion. The<br />
standard private label is mirrored by correspond<strong>in</strong>g labels, such as "GS" and "GB," <strong>in</strong> the respective fascias. The rebadg<strong>in</strong>g of the<br />
same product by retail fascia show's <strong>Carrefour</strong>'s commitment to a centralised buy<strong>in</strong>g process for the Group.
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