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Market growth was 1.4% in the 12 weeks to 16 June 2019, according to the latest results from Kantar. Performance has slowed compared to this time last year, when growth was 2.1%. We look at the factors influencing this and key retailers' performance.

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The Groceries Code Adjudicator Christine Tacon announces plans to step down from her role in June 2020.

Seven years of service

Tacon made the announcement at the Grocery Code Adjudicator's annual conference. At the same time, she shared annual survey results that revealed a reduction in supplier complaints across nine key areas.

When she hands over the reigns, Tacon will have served in the role for seven years. The new position was created in 2013 to ensure supermarkets treat their suppliers lawfully and fairly.

Prior to her appointment as GCA, Tacon's career spanned sales and marketing roles at Mars, Anchor and Vodafone, as well as running the Co-operative Group's farming business for more than a decade.

Want to know more?

Retail Analysis subscribers can stay up to date with the latest UK role changes in our quarterly Movers & Shakers report

We look the continued evolution of Aldi and Lidl UK, including three key areas the retailers are focusing on.

1. Small store expansion in London: appealing to the city shopper

After the successful trial of its first 'Local' store in Balham, South London, Aldi has announced it will be opening seven more. According to The Grocer this will include a new store to open in Camden on 27th June and conversions in Archway, Eastcote, Kingston, Kilburn, Tooting and Romford.

The new stores will be around half the size of typical Aldi stores. The range will be reduced from 1,800 SKUs to around 1,500. In order to tailor the 'Local' branch to its city location, non-food 'Special Buys' and larger pack sizes have been removed from the range. Aldi told The Grocer this is to make the store easier to shop without a car. Maintaining breadth of range and space for fresh is essential, as our ShopperVista data has revealed produce is the most shopped category in Aldi.

Aldi has emphasised this is not a move to expand into convenience, and the roll out is still part of its trial. However, expansion in city centres, and particularly London is often challenging for discounters with a lack of the larger sites with car parks they typically target. Continued innovation in small formats gives the retailer more opportunity to grow its presence in these areas and target new shoppers on different missions.

There is a sizeable opportunity for growth in London, however the competition for the best sites is intense. Our ShopperVista data shows 53% of London shoppers would use an Aldi or Lidl more if there was a store closer to them. Subscribers can read more about this in our UK discounters: factors influencing growth report.

Aldi's announcement followed on from Lidl reporting it will be investing £500m in expansion in small London stores over the next five years. This will include 40 new store openings that are smaller in size to the traditional Lidl stores. The retailer has said;

"London is at the heart of our growth plans across Great Britain."

2. Developing online: growing presence and attracting new shoppers

Aldi will be extending its relationship with iForce, showing continued investment in its online platform. iForce is an Eddie Stobart retail logistics services firm that currently support Aldi delivering its non-food 'Specialbuys' and wine products. iForce has said;

"The extension of the partnership will mean that iForce can look at developing Aldi's online proposition to grow its market share across the UK."

iForce believes that the scope of Aldi's online proposition has continued to expand and with the partnership they will grow this further.

This comes after the announcement that Lidl is "actively exploring" ecommerce in the UK for the first time.

3. Sustainability: new initiatives to reduce plastic waste

After its successful plastic free trial in Scotland Aldi will be rolling the initiative out to all stores in the UK by the end of 2019. According to Aldi the trial has already saved more than three tonnes of plastic since its launch in March.

Aldi has also recently removed all plastic bags from its stores. The retailer has pledged to reduce its plastic packaging by 25% by the end of 2023.

Lidl has pledged to reduce its own brand plastic packaging by 20% by 2022. By 2025 the retailer is looking to ensure 100% of its own brand packaging is widely recyclable, reusable or refillable. It is also looking to increase the recycled content of its own brand packaging to 50% by 2025. 

Sign-up here to receive our free newsletter that will keep you up-to-date about the latest news and developments from Aldi and Lidl.

Our view on the most important developments from the past month.

Netherlands: La Place opens Amsterdam flagship, Jumbo opens new Foodmarkt

Jumbo and La Place provides an interesting case study from the Netherlands, one that many of our Amsterdam safari groups this year have been intrigued by.  The combination of La Place’s longstanding expertise in foodservice and in catering for on the move customers is substantially enhancing the Jumbo offer in its largest Foodmarkts, and the latest of these opened last week in the mall of the Netherlands at Leidschendam. Also in the past month, a new look La Place opened on Amsterdam’s prestigious Kalverstraat. We called in last week to see how the core La Place proposition continues to evolve, in this three storey site the key addition being a roofgarden café, designed around encouraging different types of missions to the site.

 

France/ Belgium - Carrefour opens Paris restaurant, first Belgian "Carrefour café"

Earlier this month Carrefour’s Bon Appetit restaurant opened in the heart of Paris on Rue Rambuteau. Initially a test, it offers 35 covers off 63 sq m. Healthier and responsibly sourced products lie at the heart of the menu’s appeal, picking up on themes we’re increasingly seeing being the focus within Carrefour’s latest Carrefour City sites in Paris, such as the Carrefour City Beaupassage. At the same time remodeling is underway in its Belgian estate. As Carrefour shrank its Belle Ille Liege store from a hypermarket to a Carrefour Market (supermarket), it added a Carrefour café concept, with a focus on fresh in-store preparation and time of day merchandising solutions, an initiative it hopes to roll out to other stores.

UK travel - Leon and Roadchef expand partnership

Roadchef and Leon will expand their collaboration from the current two sites, adding a further 12 Leon restaurants on Roadchef motorway services sites. For Roadchef, the Mediterranean influenced healthier food offer of Leon adds a point of differentiation to their motorway services offer, while for Leon it provides an attractive route to  further UK expansion - and increased brand awareness outside of its core South East heartland - with a trusted partner. We see much opportunity for expansion in the travel sector, as more food-to-go operators look for new routes to growth. It’s been a busy month for Leon, as it unveiled a new menu with much upgraded vegan offer. According to a recent article in QSR Media, as at January 2019, 64% of sales were vegetarian products and 55% were vegan, up from 46% and 34% respectively one year previously.  

UK – Azzurri Group buys Pod to drive Coco di Mama expansion

Food-to-go specialist Pod has, over the past decade, had a significant impact on the shape of the London food-to-go market, supported by its Asian-led, healthier-focused menu. But in a move that shows just how competitive the market is, it has been reported that Pod will be acquired from its administrators by the Azzurri Group, which operates the Zizzi, ASK Italian and Coco di Mama chains. The acquisition of Pod will facilitate further expansion of its Coco di Mama operation, which in turn has expanded from 6 to 22 sites following its acquisition by Azzurri Group in 2015.  According to reports, 13 sites will be retained with a view to conversion, with nine outlets closing. While Coco di Mama is focused on London, the group has spoke of its ambitions for national rollout. A partnership with chef Theo Randall, as well as an expanded range to target more missions (including a stronger focus on coffee and breakfast) and a broader range of consumers, have been core elements driving impressive recent growth for the food-to-go chain.  

UK - Co-op & Coffee

Co-op will relaunch 10 of its coffee shops over the coming months  The coffee shop market has continued to expand and evolve. Consumer expectations have risen in response.  Co-op’s move to upgrade the proposition, in collaboration with Churchill Catering, adding a new brand name & Coffee, and more locally relevant and locally sourced menu items, means it will definitely be one we’ll keep close to in the run up to its August launch. 

Get closer to our food-to-go insights

Not already signed up to our Food-to-go Monthly Update? Click here within the channels section to activate your free access.

Look out for our annual UK food-to-go report, including our market forecasts, and an assessment of key trends and ones to watch by channel, published in July for Retail Analysis subscribers.  Get in touch to find out more about this or how our food-to-go safaris can help you unlock innovation and growth in your business.  

 

 

Presentations

25/06/2019
Kantar market shares are generated using Kantar Worldpanel’s till-roll scanning methodology and extrapolated using a sample of 30,000 households. Figures are calculated over a rolling 12 week period and include VAT.
24/06/2019
We share our thoughts on Sainsbury's meat-free butchers pop-up store in East London. As it expands its vegan-friendly meat-replacement product range, the retailer raises awareness and encourages engagement with a twist on the traditional butchers counter.
19/06/2019
M&S has been pushing deeper into both franchise development and into food-to-go specific formats over recent years - testing new locations and evolving the proposition in line with this. We take you inside its latest iteration, airside at Birmingham Airport.
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