Modern Retail in Italy | Main features and latest trends
Workshop Scanner Data - Rome, 1 October 2015
Hélène Hotellier
Responsabile Ufficio studi e Affari europei
Federdistribuzione per ADM
hh@federdistribuzione.it
Members of ADM are the three main representative trade associations of the large Modern
Retail sector - Federdistribuzione, ANCC-Coop, ANCD-Conad - and about 800 retail
companies operating in Italy.
ADM is a forum where the main retail industry associations can discuss to identify possible
common paths on institutional issues.
2
Federdistribuzione per ADM
ADM represents the Modern Retail sector in dealing with the agro-food / Fast Moving
Consumer Goods industry. ADM aims at the improvement of the supply chain, boosting and
promoting efficiency in relations between operators.
1. Focus on Italy | Macroeconomic context and forecasts
2. Focus on Italy| Household consumption model:
structural trends & impact of the crisis
4. Modern Retail in Italy | New challenges
3
Federdistribuzione per ADM
3. Modern Retail in Italy | Main features, comparison
with European countries and latest trends
1. Focus on Italy | GDP, Households consumption, Consumer prices
6.0
5.4
3.9
4.0
2.0
3.2
3.3
2.9
2.3
2.2
2.9
1.7
0.8
2.0
1.8
1.8
1.7
2.5
2.9
3.3
2.7
2.5
1.1
1.9
1.6
2.8
2.7
2.2
1.0
0.7
1.7
0.2
1.1
0.0
1.9
2.1
1.5
2.2
1.5
1.5
1.8
1.4
0.8
1.7
0.6
3.0
1.2
1.7
0.3
0.2
0.6
0.9
0.5
-0.8
0.0
-0.3
-1.6
-0.4
-1.2
-2.0
-2.6
-1.9
-2.4
-4.0
Source: Istat
GDP
2014
2013
2012
2011
2010
2008
2007
2006
2005
2004
2003
2002
2001
2000
1999
1998
1997
1996
1995
Consumer prices
2009
-5.5
-6.0
Consumption
4
Federdistribuzione per ADM
-4.0
GDP
(real terms)
Household consumption
(real terms)
Unemployment rate
(%)
Consumer prices
(% Var.)
Deficit
(Deficit/GDP)
Public debt
(Public debt/GDP)
Source: DEF Italian Government (18 september 2015)
2014
2015
2016
-0,4
+0,9
+1,6
+0,3
+0,8
+1,5
12,7
12,3
11,9
+0,2
+0,3
+1,0
-3,0
-2,6
-2,2
132,1
132,8
131,4
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Federdistribuzione per ADM
1. Focus on Italy | Macroeconomics forecasts
2. Focus on Italy | How has Household spending changed overtime
19.7%
38,9%
835
986
992
12.2%
10.1%
9.9%
24,9%
11.8%
12.7%
21,9%
€ billion
11.5% 21,4%
19.2%
24.4%
24.6%
19.6%
46,0%
33,5%
9.5%
3.3%
1.8%
11.0%
27,6%
16.0%
14.0%
13.8%
3.8%
4.5%
3.8%
3.6%
3.9%
3.7%
12.7%
13.4%
13.5%
16.6%
18.5%
18.7%
19.3%
1991
2003
2013
2014
Source: Istat, GNLC Nielsen, Indicod Ecr-TradaLab
Housing / allowances spending
455
Housing, power…
242
Transports, communication
137
Health, Education
39
Insurances, Financial services
37
Recreative spending
32,8%
32,1%
31,2%
212
98
114
45,8%
43,9%
18.9%
Food & Non Food goods spending
Non food
Food
325
Restaurants & Hotels, Travels
134
Wellness, Sport, Culture, …
191
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Federdistribuzione per ADM
429
2. Focus on Italy | Household Consumption hit by a 2-phase crisis
Household consumption
- 6,4% =
€ 63,4 bn
Source: TradeLab on Istat data
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Federdistribuzione per ADM
- 8,0% = € 79,9 bn
3. Modern Retail in Italy| Main features - 2014
Total Modern Retail sales
Total Retail sales
Every week, 60
127,3 bn €
212,2 bn €
60%
million people
enter Modern Retail stores
92% with open-ended contracts
58% women
17% under 30
+131% invested in professional training per FTE in 2014 vs 2006
Source: Federdistribuzione, Istat, Nielsen, TradeLab
8
Federdistribuzione per ADM
450.000 co-workers
3. Modern Retail in Italy | Retail formats % market shares - Total retail sales
198,5
226,3
220,4
215,4
212,2
€ billion
Modern Retail
46.1
57.7
58.159* stores
58.7
59.4
60.0
Traditional small shops
696.886 stores
29.8
28.7
27.9
27.2
11.9
12.5
12.6
12.7
12.8
2000
2011
2012
2013
2014
•Incl. Cash & Carry
Source: AC Nielsen, Istat, Indicod Ecr - TradeLab
Market stalls, ecommerce, …
188.274 stores
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Federdistribuzione per ADM
42.1
3. Modern Retail in Italy | Retail formats % market shares - Food retail sales
100,8
117,5
117,3
116,0
114,1
7.6
11.7
11.5
11.1
10.7
17.6
18.5
19.0
19.7
63,1%
22.5
27.1
Superstores (1.500 - 4.500 sq.m.)
1.619 stores
Supermarkets (400 - 1.500 sq.m.)
22.2
22.2
22.4
12.0
6.2
Hypermarkets > 4.500 sq.m.
378 stores
6.969 stores
Convenience stores
10.0
9.4
9.0
8.7
10.0
10.5
11.1
11.4
13.872 stores
Discounts
4.830 stores
18.2
17.9
17.5
16.9
9.8
10.0
10.1
10.1
10.2
2000
2011
2012
2013
2014
Source : AC Nielsen, Istat, Indicod Ecr - TradeLab
Small Traditional shops
191.540 stores
Market stalls, ecommerce,…
36.196 stores
Federdistribuzione per ADM
37.3
€ billion
72,9%
10 10
3. Modern Retail in Italy | Retail formats % market shares - Food retail sales (excl. market stalls)
0%
4%
4%
5%
8%
9%
9%
11%
14%
18%
19%
20%
22%
22%
22%
24%
26%
31%
31%
43%
64%
100%
96%
96%
95%
92%
91%
91%
89%
86%
82%
81%
80%
78%
78%
78%
76%
74%
69%
69%
57%
Ger
Fra
Ned
Bel
Swe
Den
Aus
UK
Large Modern Retail (over 400m2)
Source: Nielsen - Total Store 2012
Por
Nor
Spa
Fin
Swi
Ita
Gre
Eir
Cze
Slva
Hun
Pol
Tur
Rem (under 400m²)
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Federdistribuzione per ADM
46%
3. Modern Retail in Italy | Retail formats % market shares - Non food retail sales
100,8
108,8
103,1
99,5
98,1
4.2
4.7
6.9
5.0
6.9
5.4
6.8
5.7
6.6
5.9
€ billion
Hyper+Super
8.966 stores
19.6
30.6
30.9
31.2
32.1
Department Stores
979 stores
Large Specialized Stores
29.127 stores
42.4
41.4
40.7
39.2
Small Traditional shops
505.837 stores
14.0
15.1
15.5
15.7
16.1
2000
2011
2012
2013
2014
Source: Indicod Ecr - TradeLab
Market stalls, ecommerce,…
152.078 stores
Federdistribuzione per ADM
57.5
12 12
2010
2014
% Var.
2014 vs. 2010
Var.
776.365
755.045
-2,75
-21.320
Modern Retail
59.508*
58.159*
-2,27
-1.349
Small traditional shops
716.857
696.886
-2,79
-19.971
Market stalls
170.845
188.274
10,20
17.429
Total stores
947.210
943.319
-0,41
-3.891
Retail stores
•Incl. Cash & Carry
Source: Osservatorio del commercio (MISE) - Nielsen
Federdistribuzione per ADM
3. Modern Retail in Italy | Number of stores by retail formats (1)
13 13
2010
2014
Var.
% Var.
2014 vs. 2010
29.366
27.668
- 1.698
- 5,8
382
378
-4
- 1,0
Superstores 1500-4500 sq.m.
1.456
1.619
+ 163
+ 11,2
Supermarkets 400-1500 sq.m.
7.279
6.969
- 310
- 4,3
Convenience stores 100-400 sq.m.
15.867
13.872
- 1995
-12,6
Discounts
4.382
4.830
+ 448
+ 10,2
396
385
-11
-2,8
29.746
30.106
360
+1,2
Food Modern Retail stores
Hypermarkets > 4500 sq.m.
Cash & Carry
Non Food Modern Retail stores
Source: Osservatorio del commercio (MISE) - Nielsen
Federdistribuzione per ADM
3. Modern Retail in Italy | Number of stores by retail formats (2)
14 14
3. Modern Retail in Italy | Total sales surface - Grocery market
% Var. new sq.m.
Source: Nielsen GNLC - January ed.
15
Federdistribuzione per ADM
sq.m. (‘000)
3. Modern Retail in Italy| Top 10 food retailers: % market shares
Coop Italia
15.0
Conad
11.7
Selex
9.4
Esselunga
8.7
Gruppo Auchan
7.2
Gruppo Carrefour
6.2
Eurospin
Gruppo Pam
Finiper
3.4
3.1
2.8
Source: AC Nielsen - January 2015
16
Federdistribuzione per ADM
Sigma
4.9
3. Modern Retail in Italy | A low level of market concentration
62,5%
TESCO
ASDA
J SAINBURY’S
TESCO
UK
ASDA
SAINBURY’S
61,0%
EDEKA
REWE
SCHWARZ Gr.
EDEKA
Germany
REWE
ALDI
56,0%
CARREFOUR
LECLERC
INTERMARCHE
CARREFOUR
Spain
LECLERC
CASINO
38,0%
36,1%
MERCADONA
CARREFOUR
DIA
COOP
CONAD
SELEX
France
Italy
COOP
CONAD
SELEX
Source: Nielsen, Kantar - 2014
17
Federdistribuzione per ADM
% market share of TOP 3 food retailers
3. Modern Retail in Italy | Investments pre & post-crisis
140%
118%
120%
100%
104%
100%
96%
83%
77%
80%
81%
74%
76%
60%
40%
20%
€ 4,0 - 4,5 bn
of investments in the
pre-crisis phase
€ 2,5 - 3,0 bn
of investments today
2006
2007
2008
2009
2010
2011
2012
2013
2014
1 bn € of investments generates
750 mln € of value added &
involves 15.000 persons
Source: PwC study for Federdistribuzione - 2014 figures
18
Federdistribuzione per ADM
0%
3. Modern Retail in Italy| Sales vs. Costs
% Var. (2006 = base 100)
109.1%
110.0%
107.9%
108.0%
107.8%
107.7%
106.5%
106.0%
106.4%
106.9%
105.4%
104.0%
105.5%
106.5%
107.3%
105.6%
105.0%
102.2%
103.8%
102.0%
100.0%
100.0%
101.6%
100.0%
98.0%
94.0%
2006
2007
2008
2009
2010
2011
2012
2013
2014
Sales per
by FTE
Ricavi
FTE - Variazione % da 2006 (base 100) - All
Costi
Costsper
byFTE
FTE- Variazione % da 2006 (base 100) - All
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Federdistribuzione per ADM
96.0%
3. Modern Retail in Italy | Consumption crisis and costs increase has led to a negative profitability
Net sales = 100
2006
2010
2013
100
100
100
2,1
1,7
1,1
EBIT
1.4
0.8
Net income
-0.1
Source: TradeLab on a representative sample of retailers’ income statement
20
Federdistribuzione per ADM
Cost of sales
+ labour costs
+ other expenses
3. Modern Retail in Italy| National vs. Foreign-capital retailers
Market shares (%)
Retailers with National capital
80,3%
Retailers with Foreign capital
19,7%
Auchan (FR)
7,2 %
Carrefour (FR)
6,2 %
Lidl (DE)
2,6 %
Despar (Aspiag - AT)
2,2 %
Penny Market (DE)
1,5 %
Metro (Cash & Carry - DE) not taken into account (wholesale format)
Source: Nielsen
21
Federdistribuzione per ADM
RETAILERS
3. Modern Retail in Italy| Priority to price convenience to sustain purchasing power
35
30
25
20
17.1
18.4
19.6
22.5 23.2 23.1 22.4 22.7
20.9 21.6
24.3
15
10
8.4
7.4
7.9
8.9
9.2
9.6
10.3 10.4 10.0 10.0 10.9
25.6 26.4
27.4
28.7 29.3
12.9 13.4
12.4
12.2
11.7
0
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Share of Price promotion on total sales (%)
% ref. with price promotion
Source: Nielsen Trade*Mis - Hyper+Super+LS
22
Federdistribuzione per ADM
5
4. Modern Retail challenges | Omni-channel business model
Source: Politecnico di Milano
23
Federdistribuzione per ADM
Online sales trend
4. Modern Retail challenges | Omni-channel business model
Online sales trend
Services
Source: Politecnico di Milano
24
Federdistribuzione per ADM
Goods