The Shopper Forum ™

Welcome to our Shopper Marketing Newsletter - November Edition

We hope this newsletter will keep you up to date on the latest Shopper Marketing, Shopper Insights and Category Management initiatives.

To find out more contact: 02 9452 7777 or email:info@oblique.com.au

Shopper Marketing News:

Most valuable grocery Brands fighting fierce battle...

Intangible Business, a leading independent brand valuation consultancy, has published its annual table of the 100 most valuable grocery brands in the UK and advised the battle for shelf space is only going to get fiercer amongst brand owners.

150 of the country’s leading grocery brands were analysed using historical sales data and qualitative expert panel data - providing unique insight into each brand’s financial contribution and strength in the eyes of the consumer.

Coca-Cola again came out on top of the list, with many brands still managing to increase their value in spite of the downturn and increased pressure from private label goods. “The economic downturn has had a profound effect on the grocery market in 2008 and played straight into the hands of discount retailers. With their lower overheads, abundance of own label brands and international economies of scale, Aldi and Lidl have become the stars of the year,” Stuart Whitwell, joint managing director of Intangible Business said.

The Top 10
1. Coca-Cola, £1,151m
2. Warburtons, £583m
3. Lucozade (+1), £457m
4. Cadbury Dairy Milk (-1), £451m
5. Nescafe (+1), £415m
6. Hovis (-1), £366m
7. Robinsons, £354m
8. Andrex, £317m
9. Red Bull (+3), £267m
10.Heinz Baked Beanz (-1), £268m

The report also includes a ranking for countries of origin. The UK, which has 54 brands in the top 100 leads the USA, which has 30, and France, which has six. The report also identifies movement amongst brands over the last 12 months. The biggest movers include:

• Kettle Chips: (75) up an impressive 20 places with an increase in brand value of 28% (£64m), Kettle Chips moved up the most places. Buoyed in part by its broadened product range following the introduction of more convenient, single packets the brand is fast becoming a major competitor to its more established UK rivals Walkers, McCoy’s and Pringles.
• Mars: (53) Mars is 2008’s second best performer moving up 18 places. Constant investment in brand advertising has helped the brand maintain its position as one of the nations’ favourite chocolate bars.

Brands experiencing the biggest downward shift often faced controversy or greater competition, for example:

• Bernard Matthews: Bernard Matthews lost 28% of its brand value and only just scrapped into the top 100 in the wake of a bird flu scare last year.
• Tate & Lyle Sugar: With consumers finding it harder to distinguish between branded products and own label in this sector, Tate & Lyle Sugar fell down the top 100 this year after losing 9% in brand value.

“If, as expected, major supermarkets bring in more lines of own label products to compete with discount retailers, 2009 will see a fierce battle of brand owners,” Mr Whittle added. “We have seen examples of this in 2008 with Princes losing out to John West, Coke increasing market share over Pepsi and Warburtons firmly establishing itself as the number one provider of baked goods. This will only get worse.”

Source: AFN

Too many cooks - Super Markerting

Supermarkets sacre me....It's not just the warping effect they have on our communities, the pre-cooked garbage they manage to reposition as ready meals, the high-handed way in which they treat consumers nor even the damage they do to suppliers and independent retailers; no, what's really scary is how they render me powerless.

I'm lucky I don't need to bother a grocery hangar more than a few times a year because when I do I'm reduced to a slavering state of consumer idiocy. I'm like an under-Ritalined toddler in Toys R Us. They could use me as test-bunny for their evil schemes because, whatever ductless acquisition gland exists in the human brain to provoke helpless salivation at pretty packaging or a shiny offer - mine is in a permanent state of hair-trigger tumescence.

Which is why I no longer allow myself to go to the supermarket unaccompanied. Back in the days before we realised that supermarkets were a notch below paedophile vicars and sub-contract car-clampers in the right-thinking person's pantheon of loathing, I used to head to my local Sainsbury's (Camden Town - 8 aisles of crisps, two of fizzy drinks and enough florid nutters to populate a Restoration asylum) to 'pick up a few bits and pieces'. Four hours later I'd return with a thousand-yard stare and enough supplies for a family of eight to survive an ice-age. They say you should never shop for food when you're hungry - I'm not allowed without a responsible grown-up - for which, conveniently, read 'the Baker'.

By aisle two I'm wall-eyed with consumer lust …

"Look! Dorset Cereals Fruit & Nut Seed Muesli".

"You hate muesli. You think it tastes like dry pet food"

"Look! It's got a beautifully designed box in matt finished inks and reassuring words about sustainability and huge raisins "

"It's a trap. It's hamster bedding in a yuppie-bait wrapper. Step away from the gondola end"

As I rock backwards and forwards, crooning to myself and stroking the box, the Baker's voice rings out, commanding, metallic and oddly reminiscent of the Governor of California.

"This is not the food we are looking for." Powerful hydraulics swivel the Baker's head. A state-of-the-art target acquisition system locates three 20kg sacks of flour and a dented tin of haricots on the clearance shelf and in a blur of motion I find my limp body deposited beside the car.

Using preternatural focus to elude the siren song of marketing, the Baker has successfully collected what we need and by a complex system of interlocking reductions, offers, clipped coupons and full-contact negotiation, has persuaded the manager to personally deliver it to our kitchen and pay us a small fee for the privilege.

Do you shop with iron resolve or are you too pusillanimous when faced with premium products?

Source: The Guardian - Tim Hayward Blog

Consumers still willing to pay for quality...

Many American consumers are willing to spend more on “higher quality” menu items despite spending less on dining out.

In a new study, ‘The Consumer Pricing Strategy Report’, foodservice consultants Technomic discovered more than six out of ten consumers (61 per cent) indicated they would spend more for a higher quality sandwich if it contained premium meat; 41 per cent if it were made with premium cheese; and 34 per cent if it contained premium bread.

The report focuses on consumer and operator responses as the US restaurant industry has been hit by a “perfect storm” of price pressures.

Consumers appear to acknowledge the cost pressure on restaurants, with 75 per cent attributing rising menu prices to the higher cost of ingredients - compared to just one in four who suggest restaurants are raising prices just because they want to make more money.

While most realise that rising prices are inevitable, the majority, 56 per cent, of consumers would prefer that restaurants increase prices slowly over time to meet a specific price, rather than raising prices all at once, or by substantially increasing pricing on certain items.

Of those cutting back on food spend, the vast majority of consumers (91 per cent) report they are dining out less frequently. However, one-third (32 per cent) are purchasing less expensive food when eating out, and one-fifth (19 per cent) are ordering smaller amounts and portions. Overall, consumers are cutting back more at full-service than at limited-service restaurants, with lower income consumers the most likely to have reduced the number of times they are dining out in response to economic worries.

“Consumers are spending less on dining out and feel they have to allocate restaurant spending more wisely,” Darren Tristano, Executive Vice President of Technomic, noted. “Restaurant operators must offer a strong value equation to compete successfully for those dollars. Knowing when, how and how much to raise prices requires research into consumer intentions and behaviors as well as a close examination of industry practices.”

Source: AFN

Energy drink category up for grabs?...

Coca-Cola Amatil has announced they are on track to meet profit guidance and may have found the right energy drink to compete with V and Red Bull, with sales of Mother surpassing expectations.

“Notwithstanding the volatile market conditions, CCA has experienced solid trading in the third quarter,” a statement from the company advised. “The Australian beverages business has cycled very strong volume growth in Q3 2007 and delivered performance in line with expectations. The Australian business continues to expect to deliver high single digit earnings growth in the second half.”

The very strong third quarter was assisted by the “distraction” to major competitors Cadbury Schweppes and Frucor, according to MD Terry Davis. Danone, the owner of Frucor, and Cadbury are undertaking reviews of their beverage operations with speculation still strong that both companies could be put on the market. Coca-Cola Amatil has been among a host of companies linked to a takeover of the two companies.

Mother, the energy drink CCA re-launched earlier this year, has been the company’s most successful “new” product launch this year and has reportedly captured a 12.7% of the energy drink category in the grocery and convenience channels. This growth has been led at Coles, where it has a 28.7% share, and CCA believes the potential for further market share inroads are strong as it is due to be stocked at Woolworths outlets in the fourth quarter of 2007.

Coca-Cola has struggled for years to capture a share of the increasingly lucrative energy drink sector and credit the early success of this new product to the improved taste, innovative relaunch activity and larger pack size.

SPC Ardmona, CCA’s fruit and vegetable processor, continued to face challenges presented by the ongoing drought, with the company reporting that the restructure is on track.

“The rationalisation of the manufacturing facilities in the Goulburn Valley is on target for completion in November and there is a high level of certainty that the forecast savings of $8-10 million per annum from efficiencies and cost savings will be realised from the beginning of 2009.”

Pacific Beverages returned strong beer sales for CCA, with year to date beer sales revenue growing by more than 150%. The momentum of the Peroni and Miller brands drove the increase, with sales growth of the imported premium beer brands again exceeding 100%.

Coca-Cola Amatil will be focussing on new product development to drive category expansion, including Energy & Flavoured Milk, as part of their growth strategy for 2009. The acceleration of their Cold Drink Equipment Investment is also slated as a key goal for 2009, as is the focus on fueling the growth momentum of their alcoholic beverage business

Source: AFN

Food & Drink the only retail sales up in the UK...

Source: The Guardian UK

Demand for organic slows in the US...

Manufacturers and retailers of organic foods in the US must improve their understanding of consumer demand for organic products as sales in some categories start to plateau, a study has claimed.

In its Organic 2008: The Many Faces of Organic report, market research firm The Hartman Group said companies needed to work on their knowledge of the most "relevant" organic foods for consumers despite the growth of organics out-stripping the conventional food sector.

According to figures from the Organic Trade Association, cited by The Hartman Group, US organic food sales have grown by 17-21% a year since 1997. Total US food sales have risen by 2-4% over the same period.

However, The Hartman Group said there is evidence that that level of growth is not being enjoyed in all food categories. "As we move through 2008, beneath all the hyperbole about the dramatic growth of the organic market, rumblings of slowdowns in certain organic categories - or at least a suspected plateauing of overall organic sales - have begun to surface," the report said.

Rising awareness of and growing demand for artisan, fair trade and free range products is hitting sales of organic products, the report claimed. Consumers are also becoming unsure as to what the notion of "organic" means to them, it added.

"Another partial explanation to flattening growth comes from our qualitative interviews conducted for this study, which suggest that consumer interest is waning as 'organic' comes to mean so many things to consumers that it represents no one thing for everyone," the report explained.

"In general, while organics are still an important cue to millions of consumers for products that contribute to healthy lifestyles (especially for households with children), conventional culture is now including organic as one of several symbolic distinctions of equal importance subsumed under the moniker of 'quality'. Related to cultural concepts of high-quality foods, the concept of 'fresh products', while linked intrinsically in the minds of consumers by a solid line to organics, is also shown here in this report to have moved to the forefront of importance for conventional consumers."

Organic food in some categories - including dairy, fruit and veg and meat - is still "resonating" with consumers, The Hartman Group said. The report also claimed that "core" organic consumers are buying organic foods more frequently.

However, the report insisted that organic food makers and retailers should not rest on their laurels. "While prior to 2008 it was sufficient to assume that analogues of 'conventional' food and beverage products would sell if they were organic, the future for organics dictates a different picture," the report said. "Manufacturers and retailers will have to develop specific understandings of those organic categories that consumers find relevant and those that they find uninteresting and even frivolous."

It added: "Marketers focusing on organics will also have to understand that new organic product successes are still waiting to be developed, but these opportunities require an understanding of which types of consumers such products resonate with."

Source: Just-food

UK: What is the smart grocery shopper doing?...

International food and grocery expert IGD has published a definitive analysis of UK shoppers’ response to the credit crunch, confirming that food shoppers are economising on their food shop and spending more time bargain hunting, but believe this is not the same as down-trading.

The ‘Adapting to Change’ report also discovered that shoppers have been more willing to buy healthy and ethically-focused foods where they see genuine value.

“With the surge in interest in the provenance and ethics of food which has occurred since the last major downturn, it seems that shoppers are scrutinising value, but they are not compromising their values,” said IGD chief executive Joanne Denney-Finch.

“Overall, more than half of shoppers say they have been economising over the past six months and yet only one in ten feels they have compromised on quality. By comparison, one in five feel they have improved their food experience - smart shoppers are putting in more effort to maintain the quality of what they eat,” Ms Denney-Finch added.

Shopper destinations

The report - based on a survey of just over 1,000 shoppers revealed that, over the last six months:

* One in five (21%) shoppers say they are walking to the shops more often
* One in four (25%) is spending more time over their shopping trips
* More than one in four (27%) claim to be shopping around more

Diet and shopping basket

The report found that the contents of the shopping basket have been altered in response to economic turbulence.

* One in five shoppers (19%) say they are buying more low-priced own-label products
* One in five shoppers (20%) is choosing prepared food less often
* A similar number (19%) is opting for more fresh or chilled food

The last six months have seen 22% of shoppers buying more foods for health benefits seemingly at the expense of treats, with about one-fifth reporting they had cut back on ‘treats’. Overall, 32% of shoppers have eaten more fruit and vegetables than six months ago, and a fifth ate more fish.

The interest in ethical products has gone up despite the credit crunch, with 17% of shoppers claiming they bought more Fairtrade products than six months ago and 22% of shoppers buying more products that promise high animal welfare standards.

DIY mindset

The report established that shoppers are exhibiting a greater desire to grow, prepare or cook food for themselves.

* One in ten shoppers (10%) say they have started growing their own fruit or vegetables at home over the last six months
* 18% are making lunch at home to take to work more often
* 22% of shoppers are planning meals more carefully, and 19% are cooking smaller meals

The report also revealed a number of shoppers were responding to conditions by working longer hours, buying second-hand goods, car sharing and baking their own bread.

“Economising is not the same as downtrading. In recent years shoppers’ engagement with food has been transformed and they are still investing in brands or ranges which reinforce their values at the right price and finding a way to get what they want without compromising standards,” Ms Denney- Finch concluded.

Source: AFN

Mars on front foot with global launch of front of pack labelling...

Mars, Incorporated reported on Friday that they are to become the first confectionery company to voluntarily implement Guideline Daily Amount (GDA) nutrition labeling on all of its chocolate, non-chocolate confectionery and other food products.

“All packages will be redesigned to feature new graphics on the front and back of packages, which contain consumer-friendly, clear and easy to understand nutrition information that will help consumers make informed choices at the point of purchase. This announcement is part of a global initiative Mars is undertaking around the world,” a company statement suggested.

The issue of packaged food labelling has been prominent this year, with calls for front-of-pack labelling requirements to be introduced.

There has been an ongoing debate in Australia as to what the front-of-pack labels should tell consumers, with the Australian Food and Grocery Council, like Mars, promoting the effectiveness of the Daily Intake Guide (DIG). A number of Australian supermarkets and manufacturers have reported they will commit to adding the DIG labels to their products in the near future, but some health and consumer groups are calling for the adoption of ‘traffic light’ labelling - a system which uses three colour coded circles to display fat, saturated fat, sugar and sodium levels.

Bob Gamgort, President of Mars North America, claims the global commitment is part of their improved nutritional strategy. “Our redesigned labels are the latest examples of Mars’ commitment to health and nutrition,” he said. “By providing clear, concise and understandable information to consumers about what’s inside all of our products, we will help them to make informed decisions about the foods they eat. We make every effort to go beyond what is expected of a global food company.”

The new label, referred to as “What’s Inside,” is designed to help consumers quickly and easily locate key nutrition information. The new labels will begin appearing in December. They will be on US Mars chocolate, non-chocolate confectionery and other food products by the end of 2010. It was not revealed when the labels will be on their products in markets outside America.

The “What’s Inside” label adopts the GDA (Guideline Daily Amount) graphics that have initially appeared in Europe. GDAs feature the calorie totals in large type on the front of the products and highlight more detailed information in an easier-to-read box on the back of the product, including calories, fat, sugar and sodium. Mars’ market research earlier this year found this style and design to be the favourite among consumers, contributing to the best information retention rates.

Mars has also launched a new educational web site, which provides additional nutrition information about Mars products. Over the coming months, the site will debut tools to calculate caloric intake and tips for weight management and making healthy lifestyle choices, as well as newsletters and expert advice on healthy living, Mars advised.

“Many Americans struggle to make smart decisions when it concerns their diet; it often is difficult to eat thoughtfully and carefully. The more information consumers get, the easier it will be for them to make good choices. I think the Mars program is a wonderful first step in the direction of better labels, more information, and better decisions,” said Arthur Frank, M.D., medical director, George Washington University Weight Management Program, Washington, D.C.

Source: AFN

Health trends being to impact on childrens' diets...

A new survey from Mintel suggests adolescent’s food perceptions and actual eating habits may not be as dire as many believe.

Asking why they eat what they eat, Mintel found that two in five (42%) American kids and teens reach for foods that give them more energy. Over a third (35%) purposefully eat foods that are rich in vitamins and nutrients. Approximately a quarter try to eat foods that are low in fat and 22% look for low-in-sugar foods.

“The battle is half won,” suggests Chris Haack, senior analyst at Mintel. “Kids understand that food gives them energy and improves their overall health. Now, the challenge is to motivate more young people to actively improve what, when and how much they eat, to place healthfulness above indulgence more frequently than not.”

Mintel discovered two-thirds (65%) of kids and teens say they eat dinner at home at least five times a week; 33% do so every day. Mr Haack noted that better eating often starts at home, where parents can shape food preferences and habits. According to Mintel, only 13% of youngsters sit with the family for fewer than three dinners per week. “The perception that today’s youth constantly eats alone, on-the-go and out of the home is simply wrong,” Haack stated.

Mintel’s research also confirms that many teens are receptive to healthy eating messages. When asked about their attitudes toward food, 66% of teens said they believed “eating gives you energy/vitality,” while 61% said “it’s important to eat a balanced diet.” Two in five (41%) said they liked the trend towards healthier fast food.

Still, the number one fast food restaurant visited by youth is McDonald’s, by a large margin above better-for-you alternatives like Subway. “Health and wellness campaigns have impacted kids’ and teens’ food perceptions, but they haven’t completely changed their eating habits,” Mr Haack advised. “Companies need to find ways to reinvent home-based meals and energize healthy snacking, so today’s youth can see the benefits of better nutrition and take action.”

The US Center for Disease Control and Prevention reported in May 2008 that kids’ and teens’ obesity levels seem to be leveling off, having shown no significant increases from 1999 to 2006.

Source: Mintel

What's in the hypothetical shopping trolley in 2013?...

Business information analysts IBISWorld have released their forecast for what Australians will be piling into their shopping baskets in five years’ time.

With slower economic growth encouraging more frugal supermarket spending, and increasing health consciousness at the forefront of many a shoppers’ mind, there is a noticeable change in the food Australian consumers are choosing, noted IBISWorld’s General Manager (Australia), Robert Bryant.

Demand for dairy

Dairy consumption is on the rise, and yoghurt is high on the shopping list for many Australian families, a trend Mr Bryant expects to continue.

“Yoghurt is a convenient food because it’s relatively portable and suitable to take to the office as well as to include in kids’ lunch boxes,” he said. “Over the next few years we can expect to see an increased market share for functional yoghurts, such with added omega-3, antioxidants, vitamins and probiotic cultures, as well as organic versions.”

An ageing population should encourage greater dairy consumption due to concerns about osteoporosis, and we can also expect to see stronger demand for cheese. “Reduced fat and specialty cheeses will be in most shopping baskets of the future, particularly fortified and organic cheeses,” tipped Mr Bryant.

More red meat

Pork is likely to be less popular in coming years due to lower production and higher relative prices compared to beef, lamb and poultry, which will all enjoy increased consumption over the next five years.

“Over the next five years meat prices should fall slightly as meat production increases due to the rebuilding of herds,” Mr Bryant suggested. “However, it would be a different story if grain prices were to rise and agriculture were included in the emissions trading scheme. Then we’d see rising meat production costs, lower output and consumption and higher prices. Under an emissions scheme, demand is forecast to shift away from lamb and beef towards poultry and pig meat products as poultry and pigs are lower emitters.”

Organic red meat and poultry will continue to increase their market share, and IBISWorld expects meat producers will invest further in promoting their products based on their companies’ livestock qualities and characteristics to distinguish their meat from the competition.

Favouring fish

Consumers are set to be drawn toward seafood as concerns about healthy eating increase but, while seafood prices have declined in real terms in recent years thanks to increased imports from South East Asia and New Zealand, prices may now be set to rise. The positive health benefits are anticipated to override any rise in price, however, as demand is likely to receive a boost in the coming five years.

Higher seafood prices and greater increases in production from fish farms relative to wild-caught seafood will lead Australians to consume more seafood from fish farms, particularly bluefin tuna and barramundi. IBISWorld also expects growth of sales of seafood products that promote their sustainability credentials, both for aquaculture and wild-caught species.

Bread is back with wholegrains

After some time in the wilderness, bread is back. The popularity of low and no-carb diets, such as Atkins, is waning as more people realise the importance of wholegrains in a well-balanced diet such as a source of fibre. Specialty bakers, such as Philippa’s and Laurent will continue to expand their market share with premium products and those perceived to offer additional health benefits, Mr Bryant believes, but prices will remain relatively high due to the ongoing demand for grains to produce biofuels.

The rise in per capita consumption of wholegrains is predicted to exceed that of meat products and be similar to dairy products over the next five years.

Craving confectionery

Overall, the consumption of confectionery is declining because of health concerns and an ageing population - since teenagers are the major consumers of sweets and chocolates. There are, however, a number of product categories bucking this trend. Chewing gum will continue to be popular, according to IBISWorld, particularly as a result of promotions boasting about the dental health benefits of some gum brands. The other product likely to be more prominent in the 2013 shopping trolley is chocolate, but only of the premium, dark, organic or fair trade variety.

“Confectionery may also weather an economic downturn better than some other food products as people who purchase sweet treats will often scrimp and save on other grocery items to be able to afford them. People also tend to eat more junk food in stressful times,” Mr Bryant added.

“Customers are reading labels and buying more products which support their views on ethical consumerism, whether that’s items that are not genetically modified, or products that haven’t been exposed to pesticides or antibiotics, or those from a sustainable agriculture or fair trade environment,” he continued. “The result is good news for products which address those concerns, such as Green and Black label chocolate, fair-trade chocolate, or chocolate made from beans produced in a particular country in the confectionery aisle.”

Eating extra eggs

IBISWorld expects Australians to be eating more eggs in five years’ time as consumers become increasingly aware of the new positive health message about eggs, aided by strong promotion by the Australian Egg Corporation Limited. Mr Bryant also anticipated the expansion of private label share in free range and organic eggs lines, which will increase price competition and reduce the price of non-caged eggs.

Oil over dairy

Product innovation is driving the success of oilseed products in this category, with spray-on oils and cholesterol-lowering spreads growing in popularity despite their higher price points, compared to butter and traditional margarines. “Over the next five years we expect oilseed prices will remain high, but that won’t stop consumers from making the switch from dairy-based fats to oilseed products.”

Forgetting fruit?

While in many categories Australians are selecting healthy products over traditional favourites, we’re still lagging behind when it comes to the recommended daily intake of fruit. Over the past five years Australian expenditure on fruit fell, but IBISWorld expects that situation will reverse over the coming decade.

“Campaigns such as “Go For 2 and 5″ will start to sink in and clear up the mixed messages some consumers have taken on board because of the high sugar content of some fruit, and the fact a number of popular low carbohydrate diets condoned severely restricted fruit intake,” Mr Bryant said. “We believe price growth for fruit and nuts will accelerate and expenditure will rise by around 2% a year for the next five years. The most popular fruit choices are likely to be staple items such as apples, bananas and stone fruits, as well as some increase in the consumption of berries (high in anti-oxidants) and tropical varieties, such as paw paw.”

Versatile vegetables

Over the past five years, consumer spending on vegetables has risen 2.8% a year as a result of increased consumption as well as higher prices. “The health benefits of eating vegetables have contributed to their growing popularity,” said Mr Bryant. “Innovative and more convenient packaging is also a major factor, such as the availability of pre-cut vegetables, pre-prepared salad leaves and mixed bags of stir-fry vegetables or soup ingredients which eliminate the onerous task of washing, peeling and chopping veggies - making them much more appealing for today’s time-poor shoppers.” IBISWorld forecasts household vegetable consumption will grow at around 1.9% a year between now and 2013.

Thirst vs thrift

In the future Australians are likely to spend more on alcohol and most other drink categories, according to IBISWorld. Health concerns and price rises may see interest in soft drinks wane, and yet spending on alcohol is expected to be boosted by around 1.3% a year.

“The price of beer and spirits prices have climbed consistently over the last five years, while wine prices have fluctuated. Over the next five years beer and spirits will continue their upward trend, while wine prices will also grow because of more constraints on domestic supply. However, while prices rise, per capita alcohol consumption is expected to remain steady.”

Ready meals

Bucking the trend towards healthy eating elsewhere in the shopping basket is the processed food category - currently growing faster than most other categories. “Despite the fact it’s often not that healthy, the convenience of processed foods mean this category is unlikely to decline any time soon. In addition, the current economic slowdown will cause people to dine out less often and switch to lower priced options,” Mr Bryant claimed.

The green light for GM?

Already, some processed foods containing genetically modified ingredients are on Australian shelves, made from crops grown overseas. And though there are some genetically modified fruits and vegetables (such as tomato and rockmelon) approved for sale in the US, the EU, Canada and Japan, IBISWorld doesn’t think we’re likely to see them for sale in Australia within five years because of the time it takes to commercialise new products and to gain approval for mass production and trade.

“Having said that, it will happen. Currently trials of genetically modified pineapples, papayas and grapevines are being undertaken, with banana trials beginning later this year,” Mr Bryant noted.

Prominent items: the 2013 Shopping Basket Snapshot

• Ready meals
• Fortified or sparkling wine
• Imported/specialty beer
• Functional yoghurt
• Milk
• Reduced-fat cheese
• Organic beef
• Lean cuts of lamb
• Atlantic Salmon fillets
• Bluefin Tuna
• Wholegrain bread
• Chewing gum
• Premium dark (organic or fair trade) chocolate
• Private label free range eggs
• Cholesterol-lowering spreads
• Canola oil
• Tropical fruits and berries
• Pre-cut vegetables
• Bag of salad leaves
• Gourmet sauce

Source: IBIS

McDonald's launches 'biggest packaging initiative in the history of the brand'...

McDonald’s, the world’s largest fast-food restaurant franchise, is to banish its current packaging in a bid to improve consumer ties to the brand, with an increased focus to be placed on the product instead of the iconic ‘I’m lovin’ it’ slogan.

Speaking to reporters in America overnight, the Global Chief Marketing Officer for McDonald’s, Mary Dillon, noted that the change was the “biggest packaging initiative in the history of the brand”. Each new package sheds greater light on the item enclosed, with pictures of the product and a tagline, such as “There is only one” for Big Mac, and “Share me nots” for chicken nuggets. They utilise a wide array of fonts and expand the colour range linked to the brand by using purple and blue in conjunction with their famous bright red and yellow. On the side of the package they will highlight nutritional information, the ‘I’m lovin’ it’ tag and pictures of ingredients including eggs, lettuce and potatoes.

McDonald’s appears keen to modernize their brand at a time when the ‘better for you’ ideology is beginning to take flight. The pictures of fresh ingredients on the side of the package certainly appear to be a subtle attempt to further boost confidence in the quality of their ingredients.

Ms Dillon remained tight-lipped about the cost of the new packaging, which was designed by British-based Boxer - a subsidiary of The Marketing Store, but believes the benefits will outweigh the costs of design and implementation. “It will increase the perceptions about the quality of our food,” she claimed. “This new packaging will actually help us reintroduce our iconic products to our customers and showcase new food.”

The new packaging will be first seen in the US, UK and Ireland next month, with a gradual roll-out throughout the 118 countries in which they operate to be completed in 2010.

Source: AFN

Australian News:
Coles trialling new store concepts...

Any hopes of the Coles transformation being complete earlier than the five year estimate appear forlorn given the frank assessment of current Chief Executive Ian McLeod at an investor briefing held by Wesfarmers yesterday.

Mr McLeod suggested the supermarket chain had suffered from “chronic underinvestment”, a “lack of cohesive strategy”, and was “fundamentally broken” when Wesfarmers took over Coles in November last year. A basic “spring clean” was underway with $100 million to be spent on updating neglected stores.

The five year recovery process is reportedly on track, with three phases identified to reach the five year goal. Among the goals are to: improve the supply chain; the freshness of their range; and the look of their stores. Mr McLeod also highlighted that their promotions will change, with a focus on fewer but more compelling promotions.

Mr McLeod suggested the past management team’s promotional strategy lacked a clear focus and needed to be refined. “We were either driving for sales by pulling the lever hard … or slamming back on the brake and putting prices up to drive margin,” he said.

The company has managed to poach a number of leading retail executives from around the world, particularly the UK, with the help of former Asda boss Archie Norman and the leadership team has been completely overhauled, with all the current team new to Coles or their role since the takeover.

A full private label review is underway and pilot stores have been developed to guide the format of new stores. One of the trials has been a reduction in the range of some groceries, with the early results “encouraging”, according to Mr McLeod.

Coles has today disputed claims made by some media outlets that its plan is to reduce the product range by 30% in coming years. “Contrary to media reports, Coles does not have a plan to reduce product range in its stores by 30%,” they advised in a statement. “As part of the work to turn around the business, Coles is trialling a number of retailing concepts and experiments in selected stores. One store is trialling a change to the product range dynamics, reducing the range in some product categories and expanding the range in others.”

“While we believe there are potential opportunities to improve the range mix in our stores to offer customers more choice, at the moment we are talking about a trial in one store,” the statement concluded.

Source: AFN

Woolworth's withdraws legal action over takeover of The Warehouse Group...

Woolworths has announced that it is withdrawing its legal action to appeal a New Zealand Supreme Court decision that prevents the retailer from launching a takeover for The Warehouse Group. The New Zealand Commerce Commission stopped Woolworths and Foodstuffs from mounting separate takeover bids for The Warehouse earlier this year, saying their control of The Warehouse's Extra food retailing operation would have lessened competition. However, The Warehouse recently terminated the company's Extra rollout because of the challenging economic climate in New Zealand. "As a consequence of that change, Woolworths has reached the view that there are no relevant competition issues impacting a potential acquisition of The Warehouse and therefore no reason for it to continue with its application for leave to appeal to the Supreme Court in an endeavour to achieve a clearance," Woolworths said in a statement today. The retailer, which already has accumulated 10% stake in Warehouse, said it had yet to decide whether to mount a takeover bid. "Woolworths continues to monitor the performance of the Warehouse, the New Zealand retail climate, financial market conditions and the outlook for the New Zealand economy."

Source: Planet Retail

Coles to cull lines by 30%...

Coles will slash the number of products shoppers have to choose from by almost a third.

The supermarket group has launched a high-risk trial to cut its lines by 30 per cent, marking a drastic shift away from offering shoppers a variety of choices.

It is also likely to cut the number of weekly discounts and catalogue promotions it offers shoppers and to increase the number of private or own-label products it sells by up to 20 per cent.

An average Australian supermarket carries 20,000 lines.

The changes are aimed at increasing the profits of the business, which was sold to the Perth-based conglomerate Wesfarmers late last year.

At a briefing for investors yesterday, Ian McLeod, the new boss of Coles's supermarkets and its other retail businesses, said the company was testing the much smaller range to see how shoppers reacted to fewer products.

It is not known which food categories are affected. But in practical terms the smaller range of products means that, for example, the store will sell just three brands of mayonnaise rather than six, or two brands of olive oil rather than eight.

The trial of smaller ranges began in six stores in Melbourne in the past couple of weeks and, if successful, would be expanded to six "pilot stores" before being introduced nationally, Coles said yesterday.

Mr McLeod said the "early results are encouraging".

Coles is known in the industry for having stocked a wider range of products than its main rival, Woolworths.  

Source: SMH

Cadbury outlines restructure plans...

Cadbury has announced third quarter revenue growth of 6 per cent, in-line with expectations, as the caution of consumers fails to dampen their profit expectations. Australian results, dragged down by a 5% decline in beverage sales, were not as impressive.

Cadbury reported a renewed focus on strengthening their global chocolate, gum and candy divisions and new initiatives in their Vision into Action (VIA) strategy. They will change their structure, with four regions to become seven; including Asia-Pacific being split into Asia and Pacific (Australia, NZ, Japan) sectors.

The structural changes will result in 250 job cuts, including a number of senior managers.

“The good third quarter performance was in line with our expectations. Our new streamlined organisation, together with additional cost reduction initiatives, will increase the focus on implementing our strategic plans and underpin delivery of our margin targets,” Todd Stitzer, Chief Executive Officer, said. “Despite weaker economic conditions, we expect strong profit growth for the year and reconfirm the revenue and margin guidance we gave in July.”

In Asia Pacific, revenues were 2% ahead in the quarter, with continued growth in confectionery, up 5%, partly offset by a weaker quarter in their Australian beverage business where revenues were 5% lower.

In Australia, Cadbury suggested confectionery revenue was impacted by year-on-year changes in promotional phasing and frequency and some trade de-stocking.

Commodity costs are also causing concern for the company, with further cocoa cost pressure expected next year. The company is currently implementing price increases in most of their primary markets to cover the impact of anticipated cost rises.

There was no further announcement as to the fete of their Australian beverage operations.

A review of their beverage operations in Australia (Schweppes) began a few months ago, with an update on the process expected to be given this month. Cadbury’s focus on chocolate, gum and candy and the drop in beverage revenue is likely to increase speculation about a possible sale of Schweppes.

The ACCC continues to monitor the situation.

VIA cost reduction initiatives
In June 2007, Cadbury presented the Group’s VIA strategy which included a significant increase in our margins to mid-teens by 2011. The continuing program has been updated, with new restructuring measures to reduce costs.

Reconfiguration of chocolate manufacturing in Australia and New Zealand
“Following a review of the confectionery supply chains in Australia and New Zealand, we have started a major programme of plant optimisation and supply chain reconfiguration to simplify our manufacturing activities, creating centres focusing on key technologies. As part of the programme, we expect to reduce SKUs by around 30% and see an incremental improvement in customer service. Around 330 positions will be removed over the next two years,” a Cadbury statement advised.

Further centralisation of European operations
Cadbury is to establish a single, state-of-the-art science & technology centre of excellence in Europe focusing on gum and candy.

Outsourcing of global facilities management
Cadbury has reached agreement with a global partner to progressively provide facilities management and related services to Cadbury. Subject to consultation, this will likely result in the transfer of a significant number of existing roles and third party contracts over the coming years.

Source: AFN

Fonterra to sell its stake in Sanlu...

FONTERRA Co-operative Group may sell its stake in a Chinese dairy venture at the centre of the milk scandal that killed four babies and caused illness in 53,000 children.

Fonterra, the world's biggest dairy exporter, said talks were under way on a third-party acquisition of Sanlu Group. The Auckland-based group owns 43 per cent of Sanlu, which was the first of 22 companies in China identified as producers of contaminated baby-milk powder.

"Discussions are continuing around a number of facets of Sanlu's future," said the Fonterra chief executive, Andrew Ferrier. "These include the possibility of Sanlu being acquired by a third party."

Last month Fonterra wrote down the value of its Sanlu stake by 69 per cent, or $NZ139 million ($124 million), because of damage to the company's brand. Selling the stake may enable Fonterra to reinvest in China, provided it can prove to the New Zealand farmers who are its shareholders that it can guarantee a secure supply of quality milk.

Chinese officials are investigating how melamine, a chemical used in making plastics and tanning leather, was added to raw milk before delivery to Sanlu's plant. Melamine artificially raises the protein content in diluted milk, allowing sellers to cut costs.

Fonterra is involved in a number of discussions, and the long-term future of Sanlu and Fonterra's stake "remains uncertain at this stage", Mr Ferrier said.

Feihe Dairy, a subsidiary of American Dairy, was invited by the Chinese Government to a meeting to discuss the future of Sanlu, the Xinhua news agency, citing an unidentified company spokesman.

Newspaper reports said Beijing Sanyuan Foods and Hangzhou Wahaha Group Co were also interested in buying Sanlu.

Source: SMH

Coles to set up new discount retailer chain...

Coles Managing Director Ian McLeod announced at an analyst briefing last week that the retailer is creating a new discount supermarket concept to replace the Bi-Lo chain. The concept will be tested in “pilot stores” before being introduced nationally. McLeod expects to introduce the new format by the end of this financial year after testing whether shoppers respond to the increase in budget-price own-label products in pilot stores. It is trying out the idea in a Melbourne store, and will expand this to five or six stores if the first trial is popular. "We have got range reduction trials in a couple of stores at the moment, which are focused on choice," McLeod said. He added that pilots of various new-store formats would run for most of this year, and those that succeeded would be rolled out in the 2009-2010 financial year. In relation to the proposed new chain, he insisted the company would not repeat the mistakes of last year's rebranding of Bi-Lo into Coles outlets, which was a disaster as it alienated budget-conscious shoppers.

Source: Planet Retail

Costco sticks to Australian plans...

The Costco Country Manager for Australia, Patrick Noone, has told Reuters in an interview that the consumer downturn is no reason to delay the retailer’s entry into Australia, where it hopes to challenge the duopoly of Woolworths and Coles. "We have a robust business model. Costco does well in a down market and an up market because we are a discount brand name and people see bargains with us," he said. Noone added that Costco's comparable store sales around the world have been quite strong compared with other retailers, even as consumers slashed spending. Costco is building a store in Melbourne, due to open in 2009, and is actively looking for further sites. "We still plan to have one site in Melbourne and one in Sydney, and we're still going full-speed to achieve that," according to Noone.

Source: Planet Retail

Woolworth's reports stronger growth in Qtr1 despite economic concerns...

Woolworths, Australia’s largest supermarket operator, has today announced record first quarter sales of $12.8 billion, representing a 9.6% increase on last year.

The growth of just under ten per cent surpassed the expectations of analysts ABN Amro, who anticipated growth of around 8.4%.

Woolworths’ Chief Executive Officer, Michael Luscombe, believes the results were very positive for the company as they seek to deal with changing economic conditions. “This is a good start to the financial year. Particularly pleasing is the continued momentum in our Australian operations, with an overall improvement in comparable sales growth.
The significant re-investment in each of our businesses has continued to deliver positive results,” he advised.

Woolworths’ Australian ‘Food and Liquor’ division registered an 8.3% incline in sales, with the roll-out of their new 2010c store format, Everyday Rewards Program and ‘price re-investment’ credited with the strong result.

Their New Zealand Supermarkets division struggled in comparison, with the deteriorating economic conditions and refurbishment activity blamed for the less than spectacular outcome. New Zealand Supermarkets managed to book an increase of 3.1% in NZD terms. This represented a 5.6% decline in AUD terms, however, and was below the inflation rate (5.7%).

Petrol dollar sales for the quarter, including Woolworths/Caltex Alliance sites, increased 30.4%, with average fuel sell prices well above the prior year. Petrol comparable sales increased by 26.5% (Q4 2008: 20.4%), with comparable volumes having increased 1.7% for the quarter. The growth has been assisted by the strong interest in the Everyday Rewards Program, which now has 2.6 million registered cards.

Their BIG W, hotels and consumer electronics sectors also banked sales growth of 10% or greater, although comparative sales declined in the hotels division.

Mr Luscombe maintained their full year sales forecast, with sales growth expected to be in high single figures. “We are mindful that discretionary spending continues to be influenced by macroeconomic factors and will be influenced by the recent events in global financial markets. Subject to the uncertainty these factors create, we maintain our sales outlook for the full year where we expect sales from continuing operations to grow in the upper single digits,” he said.

Mr Luscombe two weeks ago discussed Woolworths’ lack of belief in recessions, as the country’s largest supermarket chain seeks to enhance their sales momentum while their largest competitor, Coles, focuses on a five-year turnaround.

“At Woolworths, we don’t believe in recession and we never have,” he said at the Queensland University of Technology Business Leaders’ Forum in Brisbane earlier this month. “Instead of thinking how do we stop spending, how do we stop hiring, how do we shed people? We are actually thinking and have a plan. (We are thinking) how do we push this business as hard as we can over the next 18 months, how can we ramp up the number of stores we are refurbishing, how do we ramp up our new store openings?”

Source: AFN

Woolworth's announces leadership change...

Woolworths has announced a major change in their leadership team with Naum Onikul, the current Director of Supermarkets, set to retire after 21 years with the supermarket giant. Mr Onikul is to be replaced by the current General Manager of Big W, Greg Foran, who will take on the role of Director of Food, Liquor and Petrol.

Mr Foran, who will be in charge of the company’s 780 supermarket outlets, as well as the 1022 liquor stores and over 500 petrol stations, has been in retail for almost thirty years after first starting at Woolworths as an 18-year-old in New Zealand. He has worked in a number of positions at Woolworths including GM of Private Label and has been credited for turning around the Big W business.

The promotion of Mr Foran served to highlight the strength of Woolworths’ internal management training, according to Woolworths CEO Michael Luscombe. “This will be a seamless and positive leadership transition for Woolworths, highlighting the strength and depth of the business’s succession planning and internal retail talent,” he suggested.

Julie Coates, current Chief of Logistics, will fill the vacancy as head of Big W, with Geoff Thomas to assume Ms Coates’ former role.

Source: AFN

Franklin's beginning to have an impact...

Franklins has posted its maiden first-half profit since being acquired by prominent South African retailer Pick ‘n Pay back in 2001. Since the takeover the company has struggled to make inroads in the Australian grocery sector but appears to be finding its feet after posting its first full-year profit earlier this year.

Franklins now operates 83 supermarkets throughout the state of New South Wales, seven of which are franchise stores. Three new corporate stores are anticipated to be opened in the remainder of the financial year.

Pick ‘n Pay reported that Franklins “had a very good trading period realising an operating profit before interest and capital profits of R1.5 million (A$210,000) versus a loss for the same period last year of R40.3 million (A$5.7m)”.

“We are particularly delighted with our performance in Australia and the investment we have made in this business is proving fruitful,” CEO of Pick ‘n Pay, Nick Badminton, proclaimed. “This significant turnaround over last year is due to increased operating efficiencies, high double digit turnover growth from refurbished stores and the success of the customer loyalty program.”

“We’re confident we’ll make a profit for the full year… I think the worst is behind us and we’re happy that we can get continuity in profits now,” Franklins MD Aubrey Zelinsky advised, according to The Australian. “Unless the bottom really fell out tomorrow, we should still get a profit for the full year.”

Mr Zelinsky said the retailer had noticed a change in shopping habits of consumers but did not expect this to dampen the prospect of a full-year profit.

Source: AFN

Australian Beer Awards recognise the growing craft & boutique market...

The 4th Australian Beer Awards held over the weekend made for a highlight of Good Food Month, and led to some serious beer tasting at the historic Australian Hotel with over 60 liquid ambers in competition for the prestigious awards.

A total of nine trophies were presented, with Matilda Bay Brewing Company’s Redback Original Wheat winning best Australian beer and best Australian wheat beer, while their Alpha Pale Ale took out best Australian ale.

Boutique label Snowy Mountains Brewery edged out a host of premium specialty beers to take out the Best Australian Specialty Beer Award for 2008.

“It is quite an achievement for what we are trying our best to do,” commented Snowy Mountains Brewer Kevin O’Neill, “making great beers with character using only quality and natural ingredients.”

“It is a great recognition for our Red Ale to be voted Australia’s Best Specialty Beer especially with all those other strong contenders in the field.”

Snowy Mountains Brewery is the brain-child of ski passionate beer lover Kevin O’Neill who started the alpine inspired label in 2004 after a skiing trip to the famous destination. Realising they were missing a local brew, Kevin took it upon himself to remedy the fact.

The Snowy range includes the Razorback Red Ale and last year’s winner, the Crackenback Pale Ale, the Bullocks Pilsner and Charlotte’s ‘Hefeweizen’, named after early mountaineering pioneer Charlotte Adams, a who was the first woman to climb Mt Kosciuszko in 1881.

The Australian Beer Awards are highly regarded as an Australian brewing industry benchmark recognising the growing craft, premium and boutique beer market as more and more beer lovers prefer to choose quality over quantity when it comes to a ‘cold one’ or two.

Other award winners at the prestigious event included:

Best Australian Lager - Fusion Brewing’s Bluebottle beer

Best Australian Pilsner - Brewers Pilsner

Best Australian Dark Beer - Black and Tan

Best Australian Amber - Redoak Special Strong Bitter

Best Australian Stout/Porter - Nail Stout

Source: AFN

Global News:
UK: Tesco & Sainsbury's losing share...

Tesco, Sainsbury & Waitorse are losing share of the UK grocery market, according to the latest figures from TNS Worldpanel, as consumer demand for value continues.

All three retailers increased their sales during the 12 weeks to 5 October but saw their performance lag a market that grew by 6.7% year-on-year.

Tesco saw its sales rise by 5.5%, while Sainsbury's sales climbed 5.6%. Sales at Waitrose, one of the UK's more upmarket food retailers, inched up by only 1.6%.

Ed Garner, director of research at TNS Worldpanel, said the figures confirmed that the "growth of value-based grocery retailers continues apace".

Aldi saw its sales jump 22.1% over the 12-week period, while Lidl posted sales growth of 9.8%.

Garner said Sainsbury's performance was "better than expected" given the popularity of lower-price rivals like Aldi and Lidl. He added that Tesco will hope its recent launch of a cut-price range of products will boost its sales.

Morrison and Asda, the two other 'Big Four' grocers in the UK, saw their sales climb 9.6% and 9% respectively. At the other end of the spectrum, Waitrose saw its sales squeezed.

"It is now apparent that Waitrose is under pressure as growth all but evaporates leaving the share down at 3.8%," Garner said yesterday (14 October).

TNS said the 6.7% growth seen in the UK grocery sector as a whole was due to food inflation "rather than any real growth" but the researchers claimed that price increases had reached their peak.

"Price inflation in Grocery increased marginally to 9.3% for the 12 weeks ending October 5th 2008 compared to the same period a year ago. It will start to fall towards the end of the year as some of the sharpest price rises drop out of the annual comparisons," TNS said.

Source: Just-food

UK: Supermarkets cut fuel below 1GBP per litre...

A petrol price war ensued today as two major supermarkets announced they were cutting the price of unleaded to less than £1 a litre.

Asda cut prices at its pumps by 5p a litre to 99.9p, and cut the cost of diesel to 110.9p from 116.9p.

Morrisons also announced it was dropping its prices. Motorists will now pay 99.9p for unleaded and 111.9p for diesel on the supermarket's forecourts.

Petrol has not been under £1 a litre in the UK since December last year, and prices have since soared as high as 120p a litre for unleaded and 130p a litre for diesel.

Jennifer England, a spokeswoman for Asda, said the cut would be "a welcome boost" for consumers.

"Unlike some of our competitors, our price is constant throughout the country and does not vary from area to area. This reduction will come as a relief to road users," she said.

Morrisons said the reductions would apply across its 287 UK forecourts, and that it was the sixth time it had cut petrol prices since July.

The retailer's chief executive, Marc Bolland, said: "This is strong support for the millions of motorists that are served at our forecourts. We're absolutely committed to delivering real value for all of our customers - whether they're shopping in our stores or filling up at our forecourts."

The moves came after oil prices today slid to their lowest level for nearly 14 months amid concerns the world economy is heading for a major slowdown.

Today's fall in oil prices was reflected on the stockmarket, with shares in BP sliding nearly 4%. Royal Dutch Shell fell by the same amount.

The price of oil on world markets has fallen from a high of around $147 a barrel earlier this year to around $80 last week. Prime minister Gordon Brown said he wanted this price cut to be passed on to consumers "as quickly as possible".

RAC motoring strategist Adrian Tink said: "Finally we have a bit of respite for Britain's hard-pressed motorists. For the past year they have been paying over £1 a litre for petrol - a figure that went up to £1.19 in July.

"This has hit Britain's motorists hard in a tough economic climate, with the average motorist spending over £1,300 a year to fill their tank.

"At least that figure should start to come down now and motorists will see a significant difference in their wallet when they next visit the forecourt."

Tink urged all retailers to follow with their own price cuts.

Last week, Tesco began a new round of price cuts after cutting prices by 3p a litre at its 430 forecourts. Total followed suit, while BP announced it had reduced pump prices at its 300 company-owned stores by an average of 3p a litre and some sites by 5p a litre.

Petrol prices remain above last year's levels, however. In September last year unleaded cost an average 95.2p a litre, with diesel averaging 96.9p.

Damien Cox, senior analyst at energy adviser John Hall Associates, predicted further oil price falls as the global economy deteriorates.

"With the economic situation looking the way it is, I don't think we have seen the bottom yet. There's still a little bit to come out of this over the next few months," he said.

Source: The Guardian UK

SPAIN: Carrefour relies on Private Labels

In its 2007 annual report, Carrefour Spain has announced that its discount strategy is one of the aspects most valued by its customers. Private labels have become a mainstay, generating 25% of the retailer's sales (food and non-food) during the year. The remaining 75% is made up of national and regional brands. Its competitive advantage comes from hypermarkets, since "they are a good test bed for new launches and innovations." According to the report, the retailer's priority objectives by 2008 are an optimisation of distribution costs and a return to customer loyalty through the most competitive selling prices. 2007 saw a revamp of 9,000 own-branded SKUs, including the launch of 1,600 new SKUs; a process which cost about EUR10 million (USD13.7 million) and resulted in specialised product lines: "Carrefour" (the standard brand for everyday consumer goods increased by 600 new SKUs now accounting for 2,600 SKUs), "Carrefour Calidad Y Origen" (fresh food, 200 SKUs), "Carrefour Selección" (premium brand, 275 SKUs) and "No. 1" (economy brand, 300 SKUs). Among the new lines launched by Carrefour are "Carrefour Platos Preparados" (ready meals, 100 SKUs) and "Carrefour Productos Específicos" (70 SKUs that are low in salt, no sugar, etc.). Within "Carrefour Productos Específicos", Carrefour launched, in the first half of 2008, gluten free foods. The private label range "Carrefour Kids" is aimed at children (around 80 references). Carrefour has also launched "Carrefour Eco Bio" (organic products) and "Carrefour Eco Planet" (environmentally friendly non-food products). The retailer also launched international assortments, with 1,500 references. The Spanish subsidiary closed 2007 with a net consolidated turnover of EUR9,344.5 million (USD12,786 million) ( 6.1%). Of this figure, 90% came from the hypermarket business. Including net sales from discount banner Dia of EUR3,699 million (USD5,061 million), the retailer's net sales in Spain amounted to EUR13,034 million (USD17,835 million).

Source: Planet Retail

UK: Aldi launches make-up range...

Aldi in the UK has announced it is rolling out a "sleek new fashionable make-up range" offered under its private label brand Lacura Make-Up. The new line, which is said to "match every skin tone and every eye colour", comprises powder, eyeshadow, foundation, mascara, lipstick, lipgloss, nail polish and concealer pens, starting at GBP1.99 (USD3.59) each. The launch comes on the back of Aldi's Siana anti-wrinkle cream which came out best in several tests from independent media. "Aldi now sells more pots of cream than bananas," the retailer affirmed.

Source: Planet Retail

UK: Retailers worried that downturn will mean upturn in shoplifting...

British retailers are concerned that the economic slowdown will wipe out falls in retail crime achieved over the last year.

The British Retail Consortium’s (BRC) Retail Crime Survey 2008, published on Monday, showed numbers of customer thefts down 26 per cent in the year to April and employee theft plummeting 56 per cent in the same period. The issue of shoplifting is still a costly one for retailers, however, as indicated by the fact that an offence takes place every 90 seconds - on average.

Retailers believe the reductions were a result of economic stability during that period, improved policing and their own spending on crime prevention.

“The credit crunch threatens to bring an abrupt end to this trend,” Director General Stephen Robertson said. “Recent reports have focused on a surge in shoplifting and fuel thefts. Retailers are preparing for a rapid rise in offences and are adapting crime prevention methods, for example, placing electronic security tags on expensive cuts of meat.”

Using modelling from the last recession, a leaked Home Office document warned of a significant rise in theft, burglary and violence as a result of the economic downturn.

This year’s BRC survey shows shoplifting is the most costly crime for shops. It accounted for 64 per cent of all retail crime losses. Well above burglary (16 per cent), robberies (8 per cent) and employee theft (8 per cent).

The BRC retail crime statistics are consistently higher than official recorded figures, indicating retailers continue to believe it is often not worth reporting crime to the police.

The Australian Retailers Association reported earlier this year that shoplifting figures in Australia rose from 1.5% of revenue to 2% between November last year and April; costing retailers approximately $5.8 billion annually.

The increased cost of living pressures brought about by two rate rises and rising inflation were credited with the increase in theft, and the anticipated slowdown in Australia could be expected to have a similar alarming impact on shoplifting.

The greatest increase in shoplifting was for basic necessities, with baby food, tinned food and butter proving to be the most popular food items.

Source: AFN

GLOBAL: Kellogg's and P&G continue sales momentum despite economic gloom...

Kellogg Company, the world’s largest cereal manufacturer, has reported third-quarter 2008 sales growing 9% to US$3.3b - driven by price increases and the trend toward more people eating at home.

“The Kellogg business model and strategy continue to give us the ability to offset inflationary headwinds while hitting our targets and delivering sustainable, dependable performance in these very volatile times,” said David Mackay, Kellogg’s chief executive officer.

Mr Mackay noted a shift in eating patterns, which has led to consumers choosing to eat at home more often, has helped sales.

Kellogg North America posted broad-based reported net sales growth of 10%, while Kellogg International reported third-quarter net sales growth of 9%, or 3% on an internal basis - but this excluded the favourable effects of currency translation, acquisitions and differences in the number of shipping days. The Asia Pacific region posted strong internal net sales growth of 10% and the quarter saw the completion of the acquisition of Australian natural cereal maker Specialty Cereals.

Mr Mackay remained bullish about the coming months, although predictions for the future have been tempered by market conditions.

“We remain confident in our ability to deliver another year of sustainable and dependable performance despite the uncertain economic environment and unpredictable foreign exchange markets,” Mr Mackay concluded.

The cereal and convenience foods producer has been looking for innovation to spur future growth. They recently launched a new website to facilitate the creation of new partnerships with outside companies, through which they hope to discover new technologies and new product ideas.

“When it comes to innovation, one of our guiding principles is that “Ideas Come from Anywhere, Always,” said Jim Melluish, Director of Marketing for Kellogg Company’s Open Innovation team, upon launching the site on October 3. “With this Web site we can do an even better job of connecting external ideas and opportunities with the Kellogg teams who can drive them.”

Specifically, Kellogg Company reports the website seeks promising new food, packaging, or processing technologies; partially or fully developed new products, as well as innovation collaboration opportunities. It is also designed to facilitate greater communication with consumers by allowing the public to submit their own suggestions for new products or product improvements.

“We have a long history of listening to consumers and responding to meet the growing needs of all families,” Mr Melluish claimed. “Providing an easy way for consumers who are passionate about our brands to tell us what they’d like to see is what ‘Ideas Come from Anywhere’ is all about.”

Procter & Gamble, the world’s largest consumer goods maker, has also reported solid results overnight as net sales grew nine per cent on the back of price increases and positive exchange rates.

Snacks, Coffee and Pet Care net sales increased nine per cent to $1.2 billion for the quarter on two per cent volume growth, seven per cent pricing and favourable foreign exchange rates adding two per cent. The company reported that those contributions were partially offset by a negative two per cent product mix impact from the disproportionate growth of snacks (which have lower selling prices than the segment average). The ever-popular Pringles brand was primarily behind the solid mid-single digit boost to snacks volume.

“This quarter was yet another example of the strength of P&G’s balanced brand and geographic portfolio,” said Chairman of the Board and Chief Executive Officer, A.G. Lafley. “We continue focusing on leading innovation and improving productivity to deliver superior consumer and shareholder value. This focus on delighting consumers with trusted household and personal care products that consumers purchase weekly and use daily gives me continuing confidence P&G will deliver target growth over the long term, even in a challenging economic environment.”

Procter & Gamble advised that high commodity prices remained a concern going forward, however. “We’re not seeing that commodity recession. You might be seeing it on television, but we’re not seeing it in the reality in the marketplace,” A. G. Lafley, chairman and chief executive, added in a conference call.

Source: AFN