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 Belgium
2007
Confectionary
3%
Seafood
14%
Drinks Others
7%
4%
Meat
57%
Dairy products
15%
€ 173 m
+ 38% Vs 2006
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.
The Belgian food retail market revolution
Value in 1.000.000 € for FMCG & Fresh
20,971
+3,9%
+3,9%
20,083
20,191
19,826
19,057
2002
Value share (%)
16,4
12,0
15,8
13,1
15,2
14,1
15,0
15,1
71,6
71,1
70,7
69,9
year 2003
year 2004
Hyper & super
Source: GFK
year 2005
Hard discount
Year 2006
Special Outlets
2003
2004
2005
2006
FMCG%
%value
valuechanges
changes2006
2006vs
vs2005
2005+3,9%
+3,9%
•• FMCG
(inflation+1,8%)
+1,8%)
(inflation
Premiumfresh
freshfoods
foodsoriented
orientedsupermarkets
supermarkets(GB,
(GB,
•• Premium
AD,
…)
maintain
their
value-share.
AD, …) maintain their value-share.
Hypermarketshave
haveaahard
hardtime:
time:browsing
browsingisisout
out
•• Hypermarkets
andproximity
proximityisisin.
in.
and
Discountersare
aregrowing
growingfor
forseveral
severalreasons:
reasons:next
next
•• Discounters
to
price,
also
elements
such
as
expansion,
to price, also elements such as expansion,
upgradingofoftheir
theirassortments
assortmentsininfresh
freshand
and
upgrading
prepared
meals,
increased
basket
value
and
prepared meals, increased basket value and
frequency.
frequency.
The Belgian food
retail market
Market shares Food Retailers in Belgium (incl. HD)
30%
Of which
ALDI = 11.2%
24.80%
25%
20.80%
20%
19.00%
16.90%
15%
11.70%
10%
6.80%
5%
0%
Source: Food Retailers 2007
Source: Food Retailers
2007
Carrefour
Delhaize
Colruyt
Hard
Discount
Metro Group
Others
Source:Food
FoodRetailers
Retailers2007
2007
Source:
Carrefour,Colruyt
Colruytand
andDelhaize
Delhaizerepresent
represent62.5%
62.5%ofoftotal
totalgrocery
grocerymarket
market
Carrefour,
withColruyt
Colruytgrowing
growingstrongly
stronglyinin2008
2008
with
Belgian Top Retailers
« And everything becomes possible »
56 hypermarkets
Carrefour is still #1 retailer in the
Belgian market, despite the reorganisation that the group has gone
through.
280 supermarkets
They could decide to retreat from the
Belgian market in 2009
224 proximity stores
Belgian Top Retailers
169 integrated supermarkets of average 1900m²
189 franchised supermarkets of average 1200m2
141 “Residential” stores of average 500m²
Premium retail chain open to
foreign products (already
distribute Irish beef and lamb).
18 “City” convenience of average 500m²
54 Convenience stores of average 125m²
Caddy home: online home delivery service
Belgian Top Retailers
198 Colruyt stores of average 1340m²
Colruyt is a « follower »:
38 Okay stores of average 1000m²
62 Collect & Go collecting points
Collivery: Online home delivery service
3 Bio-planets of average 1000m²
Organic and environmentally friendly products
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
The Belgian Retailers
HARD DISCOUNT
Aldi is the 4th biggest player in Belgium with a market share of
about 11%*
Aldi market: 422 stores
of average 620m²
Has experienced growing competition from Lidl, which also
offers branded products.
(* 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 Colruyt
responding 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
Total Foodservice food & drink turnover in 2007 (incl. VAT): €10,581 m
220,000 Foodservice outlets in Belgium
Facility Catering
8%
Social Catering
19%
Commercial Catering
73%
Source: Kennisdocument Foodservice 2006 – 2010, Turnover distributors
Consumer expenditure 2006 - 2010
Belgium 2006
OOH
35%
Belgium 2010
Retail
65%
OOH
40%
Retail
60%
Foodservice Margins on Food
BYPASS
BYPASS
PURCHASE €115 - 125
WHOLESALER €100
+15-25/40%
CLIENT €115 - € 140
+%
CONSUMER €
MANUFACTURER €100
Foodservice Market: Overview
PRODUCER
GOVERNMENT &
FEDERATIONS
DISTRIBUTION
FOODSERVICE – ‘OUT-OF-HOME’
Social Catering
‘at work’
healthcare
Commercial Catering
education
horeca
transport
CONSUMER
leisure
Facility Catering
petrol
vending
others
Future evolution Social Catering
OUTLETS &
TICKETS &
TREND
TREND
2.400
140 mio
SOCIAL CATERING
+ 2,0%
At Work
2.500
110 mio
- 2,5%
Education
3.000
Healthcare
EVOLUTION
TICKETS
(annual)
340 mio
+ 2,5%
Source: “Kennisdocument Foodservice 2006 – 2010”, based on expert interviews
Future evolution Commercial Catering
OUTLETS &
TREND
COMMERCIAL CATERING
45.000
TICKETS
750 mio
+ 1,5%
HoReCa
250
30 mio
+ 3,5%
Transport
9.000
Leisure
EVOLUTION
TICKETS
(annual)
90 mio
+ 2,5%
Source: “Kennisdocument Foodservice 2006 – 2010”, based on expert interviews
Future evolution Facility Catering
OUTLETS &
TREND
1.500
TICKETS
85 mio
FACILITY CATERING
+ 8,0%
Petrol
150.000
200 mio
+ 3,5%
Vending
4.000
Others
EVOLUTION
TICKETS
(annual)
N/A
+ 1,5%
Source: “Kennisdocument Foodservice 2006 – 2010”, based on expert interviews
Foodservices’ main organized players
SOCIAL CATERING
DISTRIBUTORS
DISTRIBUTORS
PRODUCERS FOOD & BEVERAGES
COMMERCIAL CATERING
FACILITY CATERING
BORD BIA SERVICES IN
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