Italy-based cooperative Conad has released its forecast for its 2018 financial performance. Conad said it expected its turnover to increase by 3% to €13.4bn. CEO Francesco Pugliese said the performance was better than expected, considering the “worrying decline in consumption” in the country.
Market leadership positions
Conad said its performance had enabled it to strengthen its share in the supermarket channel to 22.4% from 21.5% in 2017. It also experienced an increase in market share to 12.9% from 12.5% at a market level.
At the end of 2018 Conad said it is the market leader in the Abruzzo, Calabria, Lazio, Molise, Sardinia and Umbria regions. It is second in Campania, Emilia-Romagna, Sicily and third in Marche, Tuscany and Valle d'Aosta. The retailer increased its store network to 3,225 in 2018, from 3,149 in 2017.
Private label driving growth
Private label’s share of total sales is forecast to reach 30% at the end of 2018, up from 29.7%. Pugliese said half of the growth being seen by private label in Italy was driven by Conad branded products. Conad’s general manager, Francesco Avanzini, meanwhile give the pace of growth for Conad-branded products, it is aiming for it to be the market leader in 2019.
Avanzini said it would continue to use three strategic levers for growth of its private label ranges: by focusing on continuous convenience, with its Bassi & Fissi brand; on premium, with Sapori & Dintorni and Verso Natura; and on emerging shopper needs, like health and well-being, with PiacereSi.
€1.3bn investment plan for 2018-2020
Between 2017 and 2018, Conad invested €394m, allocating 74% to store openings and 26% to renovations. Following this Conad has proposed a €1.3bn investment plan for the period 2018-2020, with €530m allocated to 2019. The retailer plans to use the investment to expand its store numbers, renovate stores and make acquisitions. Conad will also develop its stores and warehouses to make them more energy-efficient.
From cooperatives to territorial platforms
Conad has also announced plans to combine cooperatives into “focused territorial platforms”. The new platforms will unite several existing cooperatives, with four being the optimal number to be combined and no more than eight. The first occurrence of this is set to involve Conad Tirreno and Nordiconad, which was negotiated on 13 December 2018, to create Conad Nord Ovest. An additional three will be discussed in 2019.