Combating the challenge of HBC private label

Transcription

1 By Robert Gregory Global Research Director part of

2 About Planet Retail We are: The leading Global Retail Analyst firm since We analyse: 7,000 retail operations across 211 markets 100,000 retailer photos from around the world Insightful Trend reports eg private label, discounting trends We serve: 80% of Top 20 Consumer Goods Manufacturers 75% of Top 20 Retailers 45% of Top 20 Technology suppliers 70% of Top 20 Financial institutions We deliver: Planet Retail s unparalleled knowledge of global retail provides retailers, suppliers and investors with critical insights that create competitive advantage. 2

3 About Planet Retail New website launched October 2010: Indepth retail technology information on top retailers Free-text search New analysis tool Customisation My Planet 3

4 Contents European HBC retailer overview Factors driving private label growth Range rationalisation Opportunity for brands: boost collaboration with retailers Increasing sophistication Opportunity for brands: emphasise brand values New economy ranges Opportunity for brands: explore new distribution channels Recommendations for vendors 4

5 Sector overview 5

6 European Channel Trends by Sales,

7 Top 10 HBC Retailers in Europe (EUR bn) 7

8 Top 10 HBC Retailers in Europe by Number of Stores 8

9 Fastest Growing in Last 5 Years AS Watson - Store numbers up by 1,128 (05-09) = +21% - 3 new market entries taking total to 25 dm - Store numbers up by 801 (05-09) = +50% - Strong organic growth in Germany - Combines competitive pricing with good shopping experience - Entry into new markets Romania & Bulgaria Pharmacy Chain Store numbers up by 565 (05-09) = +127% - Growth through M&A and organic openings - Doubts over sustained growth 9

10 Slowest Growing in Last 5 Years Schlecker - Store numbers down by 1,366 (05-09) = -10% - Faces fierce competition - Stores too downmarket and lacking investment Apoteket - Store numbers down by 339 (05-09) = -38% - Deregulation in Sweden forced monopoly to face competition DA - Store numbers down by 39 (05-09) = -7% - Suffered from price competition in Dutch market - Decline in numbers of franchisees 10

11 Top 10 Retailers in Europe by HBC sales (EUR bn) 11

12 Latest non-specialist developments Carrefour planet in France launched in

13 Latest non-specialist developments Tesco launches Your Beauty Salon in

14 Major Changes to HBC Sector and why PL matters Non-specialists expanding into area PL to differentiate Discount stores as key growth channel in Europe PL to combat price Deregulation PL following spread of multiples Governments squeezing margins on pharmacy goods Higher margin PL can restore balance Consolidation in wholesale sector (eg Alliance Boots & Celesio) Allows efficient development and distribution of PLs Internet E-commerce pushing PL 14

15 Factors driving private label growth 15

16 Retailers drive private labels on three fronts Threat for brands Opportunity for brands Range rationalisation Boost collaboration Increasing sophistication Emphasise values New Economy Exploit new channels 16

17 Less space for in-store brand promotions as retailers reduce clutter Walgreens focuses on reducing inventory. Rolling out new store Customer Centric Retailing format nationwide from SKUs down from 22,000 to 18,000 and reduced clutter. 17

18 Retailers drive private labels on three fronts Threat for brands Opportunity for brands Range rationalisation Boost collaboration Increasing sophistication Emphasise values New Economy Exploit new channels 18

19 Get closer to your retail customer to avoid SKU elimination Focused marketing and joint promotions Brand leaders can see increase in sales Brands can rationalise their own ranges Exploit online channel 19

20 Retailers drive private labels on three fronts Threat for brands Opportunity for brands Range rationalisation Boost collaboration Increasing sophistication Emphasise values New Economy Exploit new channels 20

21 Brands directly challenged by increased sophistication in premium private labels Packaging Sainsbury s, UK Boots, UK Tesco 21

22 Brands directly challenged by increased focus on execution Professionalism Tesco, UK Tesco, UK Boots concession, Target, USA 22

23 Private labels tap into ethical consumer concerns Organics and ethics AS Watson s BDIH certified natural skin care at Rossmann in Germany Sainsbury s organic hand cream, UK dm s ebelin eco-friendly beauty care, Germany 23

24 Private labels establish and promote heritage Heritage and nostalgia dm celebrates 20 th anniversary of alverde in 2009 Boots launches Original Beauty Formula in 2009 with Victorian theme 24

25 Private labels underline quality credentials Consumer trust Lidl Consumer Waitrose uses BDIH Organic magazine certification range testing is Soil and result Association its proudly own quality certified displayed assurance at new label Schlecker 25

26 Underscore brand values in marketing messages Private label as brands Boots Soltan sun care and Serum 7 private labels sell through independent pharmacies in Europe. Boots concession at CVS drugstore in the US 26

27 Retailers drive private labels on three fronts Threat for brands Opportunity for brands Range rationalisation Boost collaboration Increasing sophistication Emphasise values New Economy Exploit new channels 27

28 Underscore brand values in marketing messages Ethical stance Expertise Origin Heritage 28

29 Retailers drive private labels on three fronts Threat for brands Opportunity for brands Range rationalisation Boost collaboration Increasing sophistication Emphasise values New Economy Exploit new channels 29

30 Renewed vigour in economy lines to capture spend from down-trading consumers Discount Brands All About Men male grooming range Discount Brands displayed between old economy Tesco Value and standard Tesco private label ranges 30

31 Tesco now offers several Economy private label price points 1.15 Premium BRANDS 0.22 Discount Standard Economy Based on prices of shampoo per 100ml on November

32 Retailers drive private labels on three fronts Threat for brands Opportunity for brands Range rationalisation Boost collaboration Increasing sophistication Emphasise values New Economy Exploit new channels 32

33 Explore opportunities to supply the discount channel Nivea at Rewe s Penny L Oreal at Lidl in Switzerland note shelf ready packaging 33

34 Assess feasibility of supplying discounter fantasy brands Suhada fantasy brand at Lidl Lacura fantasy brand at Aldi 34

35 New channels in direct-to-consumer Brands become retailers Internet and social media opens up new avenue 35

36 Recommendations for vendors 36

37 Recommendations for vendors Combat range rationalisation by boosting collaboration with retailers: Share shopper insights Focus marketing spend on reinforcing core brands Secure joint promotions Explore online channel Combat increasing private label sophistication by reinforcing brand values and instore excitement. Combat renewed focus on economy ranges and pressure on margins by exploring new channels: Supply high-growth discounters looking to boost brand penetration Supply fantasy brands to discounters Partner with retailers for exclusive lines Form new partnerships outside mass food and drug channel 37

38 Contact details United Kingdom: Greater London House, Hampstead Road, London NW1 7EJ, United Kingdom T: +44 (0) F: +44 (0) Robert Gregory Global Research Director Germany: Dreieichstrasse 59, D Frankfurt am Main, Germany T: +49 (0) F: +49 (0) Planet Retail Ltd T: +44 (0) F: +44 (0) twitter: Robgregonretail Japan: Minami-Magome , Ohta-ku, Tokyo , Japan T: +81 (0) F: +81 (0)

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