Overview of the Belgium Retail & Food Service market. November 2008

Transcription

1 Overview of the Belgium Retail & Food Service market November 2008

2 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

3 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

4 Irish Food Exports to Belgium 2007 Confectionary 3% Seafood 14% Drinks 7% Others 4% Meat 57% Dairy products 15% 173 m + 38% Vs 2006

5 The Belgian Retail Market

6 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 billion Total number of grocery stores declined by 33.4% between 1995 and 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.

7 The Belgian food retail market revolution Value in for FMCG & Fresh +3,9% +3,9% 20,083 20,191 19,826 19,057 20, ,4 12,0 71,6 Source: GFK Value share (%) 15,8 13,1 71,1 15,2 14,1 70,7 15,0 15,1 69,9 year 2003 year 2004 year 2005 Year 2006 Hyper & super Hard discount Special Outlets FMCG FMCG % value value changes changes vs vs ,9% +3,9% (inflation (inflation +1,8%) +1,8%) Premium Premium fresh fresh foods foods oriented oriented supermarkets supermarkets (GB, (GB, AD, AD, ) ) maintain maintain their their value-share. value-share. Hypermarkets Hypermarkets have have a a hard hard time: time: browsing browsing is is out out and and proximity proximity is is in. in. Discounters Discounters are are growing growing for for several several reasons: reasons: next next to to price, price, also also elements elements such such as as expansion, expansion, upgrading upgrading of of their their assortments assortments in in fresh fresh and and prepared prepared meals, meals, increased increased basket basket value value and and frequency. frequency.

8 The Belgian food retail market 30% 25% 20% 15% 10% Market shares Food Retailers in Belgium (incl. HD) 24.80% 20.80% 16.90% Of which ALDI = 11.2% 19.00% 11.70% 6.80% 5% 0% Source: Food Retailers 2007 Carrefour Source: Food Retailers Delhaize 2007 Colruyt Hard Discount Metro Group Others Source: Food Retailers 2007 Source: Food Retailers 2007 Carrefour, Colruyt Colruyt and and Delhaize represent 62.5% 62.5% of of total total grocery grocerymarket with with Colruyt Colruyt growing strongly in in

9 Belgian Top Retailers «And everything becomes possible» 56 hypermarkets 280 supermarkets Carrefour is still #1 retailer in the Belgian market, despite the reorganisation that the group has gone through. They could decide to retreat from the Belgian market in proximity stores

10 Belgian Top Retailers 169 integrated supermarkets of average 1900m² 189 franchised supermarkets of average 1200m Residential stores of average 500m² 18 City convenience of average 500m² Premium retail chain open to foreign products (already distribute Irish beef and lamb). 54 Convenience stores of average 125m² Caddy home: online home delivery service

11 Belgian Top Retailers 198 Colruyt stores of average 1340m² Colruyt is a «follower»: 38 Okay stores of average 1000m² Will take no risk in listing an innovative concept or a new brand. 62 Collect & Go collecting points Collivery: Online home delivery service This retailer has been growing a lot recently and is attracting more and more consumers due to lower prices and high number of outlets 3 Bio-planets of average 1000m² Organic and environmentally friendly products

12 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)

13 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

14 The Belgian Foodservice Market

15 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 , Turnover distributors

16 Consumer expenditure Belgium 2006 OOH 35% Retail 65% Belgium 2010 OOH 40% Retail 60%

17 Foodservice Margins on Food PURCHASE BYPASS MANUFACTURER 100 BYPASS WHOLESALER /40% CLIENT % CONSUMER

18 Foodservice Market: Overview PRODUCER GOVERNMENT & FEDERATIONS DISTRIBUTION FOODSERVICE OUT-OF-HOME Social Catering Commercial Catering Facility Catering at work healthcare education horeca transport leisure petrol vending others CONSUMER

19 Future evolution Social Catering OUTLETS & TREND TICKETS & TREND EVOLUTION TICKETS (annual) mio At Work + 2,0% SOCIAL CATERING Education Healthcare mio 340 mio - 2,5% + 2,5% Source: Kennisdocument Foodservice , based on expert interviews

20 Future evolution Commercial Catering OUTLETS & TREND TICKETS EVOLUTION TICKETS (annual) COMMERCIAL CATERING HoReCa Transport Leisure mio 30 mio 90 mio + 1,5% + 3,5% + 2,5% Source: Kennisdocument Foodservice , based on expert interviews

21 Future evolution Facility Catering OUTLETS & TREND TICKETS EVOLUTION TICKETS (annual) mio FACILITY CATERING Petrol Vending Others mio N/A + 8,0% + 3,5% + 1,5% Source: Kennisdocument Foodservice , based on expert interviews

22 Foodservices main organized players PRODUCERS FOOD & BEVERAGES DISTRIBUTORS DISTRIBUTORS SOCIAL CATERING COMMERCIAL CATERING FACILITY CATERING

23 BORD BIA SERVICES IN BELGIUM 2009 Business development programme Retailers Day (September) Customised individual client services Gap analysis PR In-store promotions Store audits Distributor searches Knowledge hub Buyer Newsletter Confectionary Inspiration Expedition France & Belgium Updated Foodservice Operators Directory France & Belgium Directory of Belgian food manufacturers