Latest insights and store visits

We’ve been in-store at one of Deli de Luca’s last format stores in Oslo, on Torgata, to see how the concept is evolving to meet a range of food-to-go needs.

Focused on food-to-go

Deli de Luca forms part of Norgesgruppen, which is Norway’s number one food retailer, operating a variety of formats including Meny supermarkets and KIWI discount stores. But Deli de Luca sits apart from those businesses, with a focus and personality of its own.  Almost the entire range in this store is focused on food and drink for now missions, meaning it competes most directly with coffee shops, sandwich bars, QSRs and restaurants rather than food retail stores.

Counter served, but operational simplicity is a focus

The counter displays are a core feature of the store, and draw customers in through the abundance of product on display for example in sandwiches. Ranges continue to be updated and evolved, with for example the hot pizza range and ice cream offer among those receiving a recent upgrade.

Quality coffee and range breadth underpin the offer

Coffee is provided via bean to cup machines  barista style over the counter, impacted by the need to drive operational simplicity in a market where labour costs are extremely high. But there’s a focus within this on delivering the best coffee they can to their customers, with machines imported from the US. Across the wider range, healthier products are playing an expanding role in the offer, with free from, vegan and vegetarian ranges clearly signposted.

An attractive store environment that encourages dwell time

On this and previous visits to Deli de Luca, we’ve been drawn in by the enticing environment, supported particularly well in its latest format by the seating area. In this store, the seating area is on the right on entry to the store, with the counter and main store to the left. The bean to cup coffee offer sits at the intersection of the two, making a strong first impression. 

A brand with food-to-go personality

Deli de Luca does the softer things very well. The store environment is part of this, but so too is the messaging in-store, as well as the customer service focus. Deli de Luca MD Tormod Lier spoke at our Food-to-Go Summit last year about the evolution of the business, how the proposition is evolving and what could be next. On the basis of this store, an exciting future awaits.

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We round up the latest format developments from Ahold Delhaize. The retailer is continuing the next phase of the Food Lion roll out in North America. Meanwhile it has acquired ten stores and has launched a new restaurant concept in Romania.

USA: Food Lion invests €158m in 92 store refurbishments

As part of its ongoing ‘Easy, Fresh and Affordable’ strategy, Food Lion is remodelling 92 stores in South Carolina. It is investing €158m in the refurbishments, lowering prices and expanding ranges with a focus on organic, free-from, local and natural products.

There will also be walk-in produce coolers at select stores, as well as improvements to delis and bakeries.

Romania: Mega Image acquires 10 Zanfir stores...

Following approval from local competition authorities, Mega Image has acquired 10 stores in the Zanfir network of Vrancea, eastern Romania. This will see the stores become integrated into the Mega Image and Shop & Go network.

In 2017, Zanfir achieved a turnover of €42m, an increase of 31% versus the previous year. However, profit declined by 25% to €645k.

Commenting on the development, Mircea Moga, CEO of Mega Image said, ‘Taking over the most important player in the retail industry on the Vrancea local market is part of our strategy to develop and expand to new territories. We are strengthening our position in a potentially mature region with a mature market where we can expect to meet new customers and bring them our quality products, inspire them and give them new shopping experiences

...As it opens restaurant concept

In other news, Mega Image has opened its first restaurant concept, Maison des Chefs, in Bucharest.

The restaurant combines the following concepts:

• Casual Bistro, with a menu designed by Alex Iacob, a prominent local chef. Meals are prepared using Mega Image’s own products
• Arc Bakery
• Fromagerie with 70 speciality cheeses
• Wine Gallery with over 200 wines

Source: Mega Image

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We look at how Dollar General and Dollar Tree finished the year and their strategic plans for the next 12 months.

Strong end to the year at Dollar General

Dollar General delivered a strong end to the year, with net sales up 8.5% to $6.6bn in the fourth quarter. Same-store sales increased 4.0%. For the full year, net sales increased 9.2% to $25.6bn, with net income up 3.3% to $1.6bn. The strong Q4 performance was driven by growth in average transaction and customer traffic, with the business benefitting from the acceleration of food stamps payments during the government shutdown. This provides the retailer with a solid platform for the year ahead, forecasting net sales growth of 7.0%.

Primed for growth with new strategic initiatives

Dollar General will look to several programmes to drive growth in the year ahead. Some of these build on existing initiatives, while DG Fresh and Fast Track are new strategic programmes for the company. The breadth of these initiatives demonstrates how the retailer continues to evolve and aims to embed its position as the leading operator in the segment.

• DG Fresh – a new strategic, multi-phase shift to self-distribution of fresh and frozen foods, helping to improve margins, product availability and provide more control for its fresh food strategy. By the end of the year, it aims to serve 5,000 stores from four new DG Fresh distribution facilities
• Fast Track – two-pronged approach to increasing labor productivity in its stores, enhancing customer convenience and improving on-shelf availability. Includes the use of one-touch replenishment and self-checkout roll-out
• Digital strategy – expanding the DG GO! app, including self-scanning technology, to more stores, increasing the subscriber base for digital coupons and piloting store pickup for online orders
• Non-consumables initiative (NCI) – rolling out a new and expanded range of products in home, domestics, housewares, party and occasion categories to 1,700 additional stores
• New stores – will open 975 new stores and remodel 1,000 mature stores; around 500 of these will be to the Dollar General Plus format. It will also open 10 DGX stores, its hybrid convenience-dollar store model. By the end of the financial year, it will operate almost 16,400 stores
• Cooler doors expansion – plans to add 40,000 cooler doors and expand fresh produce to 200 stores
• Better for You initiative – adding healthier food options to 3,500 additional stores, taking the total to 6,000

Source: IGD Research

Almost 600 Family Dollar stores to be closed or converted

At Dollar Tree, the focus will be on improving the core business. It will continue to overhaul the Family Dollar business it acquired in 2015. The deal has proven challenging for Dollar Tree. Over the next 12 months, almost 400 Family Dollar stores will be closed while a further 200 will be converted to the Dollar Tree format. A further 1,000 stores will be remodelled. As part of this process, new $1 Dollar Tree sections will be added to the stores.

Family Dollar turnaround gaining momentum

The stronger performance of the Dollar Tree business was reflected in the fourth quarter results. Same-store sales increased by 3.2% compared to an increase of 1.4% at the Family Dollar banner stores. This was the strongest performance of the year for the Family Dollar stores, reflecting a degree of momentum with the turnaround plan. Sales for the total business ended 2.6% higher at $22.8bn, with a total store count of 15,237.

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