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Overview of the Belgium Retail
& Food Service market
November 2008
Overview
• Economy:
– The Belgian economy grew by 2.7% in 2007 (forecast 2008: 2.1%)
– Unemployment rate at end of Sept. 2008: 6.6%
• Belgian consumer:
– Consumer spend per capita reached €16,990 in 2007 (+4.2% vs 2006)
– Consumer price inflation stood at 1.82% in 2007
but should be higher in 2008 (3.83% in Q1)
• Belgian population:
– Stable population of 10.6 million, with Brussels accommodating 10%
– Second highest population density in Europe
– Country divided in terms of language and culture
Source: Belgostat
Overview
• Future prospects:
The Belgian market is expected to remain one of the most stable, yet
fiercely contested, grocery markets in Europe in the medium term as a
result of:
– Saturated supermarket provision and strict planning laws limiting new store growth and deterring new entrants
– High degree of population concentration
– Colruyt’s reactive price strategy, and the growth of the discount sector
Irish Food Exports to Belgium2007
€ 173 m
+ 38% Vs 2006
Meat
57%
Others
4%
Drinks
7%Confectionary
3%Seafood
14%
Dairy products
15%
The Belgian Retail Market
Market Structure
• The Belgian grocery retail market is worth €36.2 billion and although it is one
of the smallest markets in Western Europe, spending per capita is high
• Food sales account for 68.7% of the grocery market in Belgium i.e. €24.85
billion
• Total number of grocery stores declined by 33.4% between 1995 and 2004.
• Importance of small independent retailers has reduced but number of smaller
outlets has remained broadly stable due to larger multiples increasing their
market share through franchise operations.
• Importance of larger stores low in comparison to rest of Europe, caused by
tough planning legislation preventing openings.
• Importance of supermarkets very high in comparison to other European
markets, similar to neighbouring Netherlands.
• FMCG % value changes 2006 vs 2005 +3,9% (inflation +1,8%)
• Premium fresh foods oriented supermarkets (GB, AD, …) maintain their value-share.
• Hypermarkets have a hard time: browsing is out and proximity is in.
• Discounters are growing for several reasons: next to price, also elements such as expansion, upgrading of their assortments in fresh and prepared meals, increased basket value and frequency.
• FMCG % value changes 2006 vs 2005 +3,9% (inflation +1,8%)
• Premium fresh foods oriented supermarkets (GB, AD, …) maintain their value-share.
• Hypermarkets have a hard time: browsing is out and proximity is in.
• Discounters are growing for several reasons: next to price, also elements such as expansion, upgrading of their assortments in fresh and prepared meals, increased basket value and frequency.
The Belgian food retail market revolution
19,057
19,82620,083
20,191
20,971
2002 2003 2004 2005 2006
Value in 1.000.000 € for FMCG & Fresh
Source: GFK
71,6
12,016,4
71,1
13,1
15,8
70,7
14,1
15,2
69,9
15,1
15,0
year 2003 year 2004 year 2005 Year 2006
Value share (%)
Hyper & super Hard discount Special Outlets
+3,9%+3,9%
Market shares Food Retailers in Belgium (incl. HD)
The Belgian food retail market
Carrefour, Colruyt and Delhaize represent 62.5% of total grocery market
with Colruyt growing strongly in 2008 Carrefour, Colruyt and Delhaize represent 62.5% of total grocery market
with Colruyt growing strongly in 2008
Source: Food Retailers 2007Source: Food Retailers 2007
24.80%
20.80%
16.90%19.00%
6.80%
11.70%
0%
5%
10%
15%
20%
25%
30%
Carrefour Delhaize Colruyt Hard
Discount
Metro Group Others
Source: Food Retailers 2007Source: Food Retailers 2007
Of which
ALDI = 11.2%
Belgian Top Retailers
« And everything becomes possible »
56 hypermarkets
280 supermarkets
224 proximity stores
Carrefour is still #1 retailer in the
Belgian market, despite the re-
organisation that the group has gone
through.
They could decide to retreat from the
Belgian market in 2009
169 integrated supermarkets of average 1900m²
189 franchised supermarkets of average 1200m2
141 “Residential” stores of average 500m²
18 “City” convenience of average 500m²
54 Convenience stores of average 125m²
Caddy home: online home delivery service
Premium retail chain open to
foreign products (already
distribute Irish beef and lamb).
Belgian Top Retailers
198 Colruyt stores of average 1340m²
Collivery: Online home delivery service
38 Okay stores of average 1000m²
62 Collect & Go collecting points
3 Bio-planets of average 1000m²
Organic and environmentally friendly products
Colruyt is a « follower »:
Will take no risk in listing an
innovative concept or a new brand.
This retailer has been growing a lot
recently and is attracting more and
more consumers due to lower prices
and high number of outlets
Belgian Top Retailers
Aldi market: 422 stores
of average 620m²
Aldi is the 4th biggest player in Belgium with a market share ofabout 11%*
Has experienced growing competition from Lidl, which also offers branded products.
The Belgian Retailers
HARD DISCOUNT
(* Source: GFK – Q2 2007)
Current and Future Challenges
• Food retail:
– Belgian market to remain stable yet highly competitive
– Price competition expected to continue in the short term, with Colruytresponding to competitor challenges, particularly from Carrefour
– Recent price activity, and the continued success of the discount sector has already caused debate as to how far price cutting can go in a market in which quality and service are highly rated by consumers
– Retailer expansion will focus on convenience stores, as this sector is currently underdeveloped and set to experience growth
– Transfer of independent traders to franchise operators of the major players from competitors rather than new stores due to planning restrictions
– Home shopping expected to increase. Colruyt and Delhaize continue to expand online operations
The Belgian Foodservice Market
Total turnover Belgian Foodservice Market
Social Catering
19%
Commercial Catering
73%
Facility Catering
8%
Source: Kennisdocument Foodservice 2006 – 2010, Turnover distributors
Total Foodservice food & drink turnover in 2007 (incl. VAT): €10,581 m
220,000 Foodservice outlets in Belgium
Consumer expenditure 2006 - 2010
Belgium 2006
OOH
35%
Retail
65%
Belgium 2010
OOH
40%
Retail
60%
Foodservice Margins on Food
MANUFACTURER €100PURCHASE €115 - 125
WHOLESALER €100
CLIENT €115 - € 140
CONSUMER €
+15-25/40%
+%
BYPASS
BYPASS
Commercial CateringSocial Catering Facility Catering
transport vending othershealthcare education horeca petrolleisure‘at work’
CONSUMER
FOODSERVICE – ‘OUT-OF-HOME’
PRODUCER
GOVERNMENT & FEDERATIONS
DISTRIBUTION
Foodservice Market: Overview
Future evolution Social Catering
SOCIAL CATERING
At Work
Education
Healthcare
2.400
+ 2,0%
OUTLETS &
TREND
TICKETS &
TREND
EVOLUTIONTICKETS (annual)
140 mio
2.500
- 2,5%
110 mio
3.000
+ 2,5%
340 mio
Source: “Kennisdocument Foodservice 2006 – 2010”, based on expert interviews
Future evolution Commercial Catering
COMMERCIAL CATERING
HoReCa
Transport
Leisure
45.000
+ 1,5%
750 mio
250
+ 3,5%
30 mio
9.000
+ 2,5%
90 mio
OUTLETS &
TRENDTICKETS
EVOLUTIONTICKETS (annual)
Source: “Kennisdocument Foodservice 2006 – 2010”, based on expert interviews
Future evolution Facility Catering
FACILITY CATERING
Petrol
Vending
Others
1.500
+ 8,0%
85 mio
150.000
+ 3,5%
200 mio
4.000
+ 1,5%
N/A
OUTLETS &
TRENDTICKETS
EVOLUTIONTICKETS (annual)
Source: “Kennisdocument Foodservice 2006 – 2010”, based on expert interviews
Foodservices’ main organized players
PRODUCERS FOOD & BEVERAGES
SOCIAL CATERING COMMERCIAL CATERING FACILITY CATERING
DISTRIBUTORS
DISTRIBUTORS
BORD BIA SERVICES IN BELGIUM 2009
ü Business development programme
ü Retailers Day (September)
ü Customised individual client services
ü Gap analysis
ü PR
ü In-store promotions
ü Store audits
ü Distributor searches
ü Knowledge hub
ü Buyer Newsletter
ü Confectionary Inspiration Expedition France & Belgium
ü Updated Foodservice Operators Directory France & Belgium
ü Directory of Belgian food manufacturers