Carrefour Discount: our response to consumer expectations
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1 Carrefour Discount: our response to consumer expectations A tough economic situation is changing consumer behaviour With the global economic crisis, rising unemployment and declining consumption, purchasing power has become the main concern for 61% of French households 1. Purchasing behaviour has changed radically as consumers adapt their needs, change their spending priorities and have begun to make budgetary decisions that push them more towards essential products. A recent study by TNS World Panel shows that priority is being given foremost to basic food products to the detriment of non-food items, notably household and personal care products. Similarly, when shopping for food, households are now turning more deliberately towards new distribution channels, such as hard discount banners and towards lower-priced items like distributor brands. Even so, 60% of consumers agree that price is not the only motivating factor. Moreover, not all households are convinced by low cost banners 1. Moreover, when questioned about how they adapt their spending, French consumers say they cut back on food spending or try to consume better by purchasing 2 : Only necessary products and eliminating non-essentials (40%) Quality products (39%) Fewer food items (10%). A new tailor-made product line covering core consumer needs In today s tough economic environment, Carrefour wants to provide consumers with a tailor-made solution for keeping a grip on spending on everyday needs while offering the support of a national brand. With its hard discount pricing policy, Carrefour Discount proposes 400 reference items ranging from food to household goods and personal care products, covering the essential needs of everyday life: 83% food products: o Dry goods: cereal, coffee, tea, biscuits, flour, sugar, canned goods, prepared dishes o Fresh produce: yoghurt, cheese, cold cuts, frozen foods, bakery goods o Liquids: fruit juice, soda, bottled water 17% household goods and personal care products: o Household goods: cleaning products o Beauty and personal care products: tissue paper, diapers, wipes, shampoo 1 Référenseigne Study, 2008 TNS World Panel 2 Ipsos Consume better survey April 2009
2 This has been confirmed by our first consumer surveys. Among those that tested items in the Carrefour Discount product line 3 : 93% of customers surveyed said they would have no problem buying Carrefour Discount products 95% of our customers surveyed said they found the prices of Carrefour Discount products to be affordable 72% of non-carrefour shoppers said they found the Carrefour Discount line to be appealing, including both the name and packaging. A multi-banner product line available in stores at the end of May With Carrefour Discount, Carrefour offers its customers a direct alternative to hard discount brands while letting them benefit from the strengths of the Carrefour brand: quality, innovation and prices. The Carrefour Discount product line rounds out Carrefour s brand portfolio by offering consumers greater choice. To be launched in France at the end of May, Carrefour Discount will be available in 1200 Carrefour hypermarkets, Carrefour Market and Champion supermarkets, Carrefour City and Carrefour Contact convenience stores, as well as online at Ooshop, Carrefour s online grocery store. Carrefour Discount becomes the first multi-banner low-cost product line. It will be displayed alongside national brands as well as the other Carrefour brand product lines. From now on, shoppers will have access to the full pricing range, under the same banner and within the same store. 3 Study conducted in December 2008 on a sample of 700 consumers, customers and non-customers of the banner Panel on the web
3 Carrefour Discount: the quality of the Carrefour brand at very low prices Quality: a commitment inscribed in the genes of the Carrefour brand Carrefour Discount fits within the tradition of Carrefour brands by proposing the best price/quality trade off for all 400 reference items. The prices of Carrefour Discount products are aligned with those of hard discount banners, but without sacrificing in the least the quality demanded by the Carrefour group. The Carrefour Discount product line meets the quality commitments of the Carrefour Charter: Products are made by Carrefour-certified suppliers in compliance with precise, rigorous specifications, that notably specify the origins of selected raw materials; Products contain no GMOs; Food irradiation is not permitted (no radiation treatments for better conservation); Products are tested and analysed to verify quality compliance Before marketing, products are tested by external consumer panels to guarantee organoleptic quality. Of special note: organoleptic tests conducted with our customers before launching the Carrefour Discount brand gave a satisfaction rate of over 98%. Quality: an approach shared with our suppliers To guarantee the quality of its food products, notably for its own-brand products, Carrefour has set up a concrete quality control procedure divided into several phases, including the establishment of strict specifications and audits of quality control procedures at its suppliers production sites. Suppliers are audited with respect to health and safety conditions, risk control and application of an HACCP plan to guarantee food safety, traceability and compliance with specifications. In addition, Carrefour endeavours to verify progress in product development and compliance with the application of the Group s no GMO policy.
4 Carrefour Discount: Simple packaging makes all the difference With Carrefour Discount, Carrefour offers a product line that appeals to the customers of all Carrefour banners, thanks notably to simple, easy-to-identify packaging that makes all the difference. An easy-to-identify logo The logo of the new product line is an astute combination of the Carrefour icon, which brings to mind the commitments of the group s quality charter, and the word discount, a clear and simple pronouncement of the product positioning. The design expresses the values of the product line: simple, visible and modern. The logo s placement and handwritten script reinforce the notion of being close to customers. Modern, simple packaging, easy to spot on the shelf The product is pictured without frills against a white background, which increases its visibility on the shelf and reinforces the idea of an essential product. Very sharp colour segmentation is used to facilitate readability. The simplified packaging also conveys a sense of complicity and closeness. The visual illustrating the product can be photographed, hyper-realistic or simply sketched depending on the printing constraints. Information is also prioritised to facilitate the customer s choice. Nutritional labels to guide consumers To guide customers when making purchases, nutritional information based on the French National Food Health Plan (PNNS) is displayed on the back of all packaging, in the same way as for other Carrefour brand products. Nutrition labels were developed with experts from Carrefour s Scientific Committee and from consumer associations. A set of dials portrays the key nutritional components depending on the product, including fat, simple and complex carbohydrates, protein, fibre and salt. Each dial symbolises the daily recommended amount of that component and the coloured portion indicates how much a serving of the product contributes to the recommended daily requirement. Calculations are always based on a person with a recommended daily calorie intake of 1,900kcal.
5
6 Carrefour: Over 30 years of innovation on behalf of our customers Carrefour Discount: a new product line to strengthen the Carrefour brand portfolio Carrefour Discount, the Group s latest innovation, is positioned as the low-cost product line of Carrefour s brand architecture. Carrefour Discount rounds out the group s existing brand portfolio by providing a direct alternative to hard discount brands, while offering customers a broad selection as budgetary concerns influence consumer behaviour. Responding to a real consumer need, Carrefour Discount offers quality products at very low prices, in keeping with the pioneering spirit of the Carrefour banner. Historical overview of the Carrefour brand A pioneer in its market for over 30 years, Carrefour has always innovated in response to customer expectations and consumer trends. 1976: Carrefour launched Produits Libres, the first line of unbranded products To counter fears of certain national brands that hesitated to market their products in hypermarkets, Carrefour launched Produits Libres. This unbranded line of about fifty products broke with the classic conventions of the consumer market. With sober packaging and a very aggressive pricing policy, the line was developed in partnership with French small and medium-sized enterprises (SME) to meet the banner s quality requirements. 1985: Carrefour develops the first distributor brand Ten years ahead of its competitors, Carrefour launched its first Carrefour brand product line. Aware of its important role with respect to consumers, Carrefour went even further by introducing precautionary product principles. These innovative initiatives included dating eggs or banning GMOs from all ownbrand products. In 1991, Carrefour created Carrefour Quality Commitment Lines to guarantee quality, taste and product authenticity while offering attractive prices to consumers and fair pay to producers. Carrefour further enriched its offer through complementary product lines geared towards specific segments in keeping with consumer expectations. Regional specialities were highlighted through the Reflets de France brand (1995) followed by the Carrefour Bio certified organic brand in 1997, and Marque n 1, a discount product line offering the lowest prices on the market. 2005: Carrefour splits its brand into three product lines To clarify its offer and brand portfolio, Carrefour overhauled all the brand s product lines and visual identities through the creation of three distinct product lines. Customers can chose between everyday products (Carrefour), products complying with specific sustainable development commitments (Carrefour Agir) and exceptional products or original recipes (Carrefour Selection).
7 The Carrefour brands Carrefour (core brand) Responding to customers daily needs Combining a full range of everyday products with the best price/quality trade off, the Carrefour brand is perfectly adapted to all the needs and expectations of consumers through a variety of product themes: Carrefour Light, Carrefour Kids, Carrefour Baby, Carrefour Exotic, Carrefour Men, Carrefour Home, Carrefour Cosmetics. This product line accounts for 80% of the banner s assortment. Carrefour Agir: Responding to the sustainable development commitments of customers By combining Carrefour s quality standards with responsible consumption, the Carrefour Agir line offers customers the possibility of making purchases that also promote sustainable development. This product line has been divided into four themes, each with its own private label: Carrefour Agir Bio: organic food products Carrefour Agir Eco Planète: environmentally-friendly products that help preserve the planet Carrefour Agir Solidaire: fair trade products Carrefour Agir Nutrition: health foods Carrefour Sélection: Responding to the exceptional needs of customers To offer gourmet and gourmand consumers the possibility of treating themselves to a unique moment of pleasure, the Carrefour Selection line proposes over 150 high quality food products that combine refinement, original recipes and affordable prices.
8 Carrefour s brand portfolio
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