Private Label opportunities in the Russian market

The Russian food market is rapidly changing. Modern retail is growing at the expense of open markets, mom-and-pop shops, street vendors and corner stores (traditional trade). Although the Russian retail market is consolidating it still remains relatively fragmented. In the process of concentration many independent retailers are expected to be absorbed by larger players or to disappear from the market.

In view of the current economic situation Russian consumers are very price sensitive. Branded products are constantly in promotion and shoppers look for the best deal. They easily switch stores and brands.

At the same time the market share of Private Label is growing. Retailers consider these products of strategic importance as they allow to differentiate from the competition and build shopper loyalty to the store. Specifically, in the Russian market where brands are constantly in promotion (promo share is close to 60%), Private Label enables a retailer to create an attractive price perception.

Learnings from Europe
Based on our experience in Europe, the most sophisticated Private Label region in the world, we expect that many smaller brands will be pushed out of the Russian market and replaced by Private Label products.

Opportunities for manufacturers
The supply side of the Russian market is very fragmented with many relatively small manufacturers all offering their own brands. With heavy marketing and promotional support, the margin of the brands has deteriorated over time.

Local manufacturers recognise the irreversible changes that are taking place in the Russian market and prepare for action. Companies consider that being the first in Private Label manufacturing may result in a strong and long-term profitable position. At the same time, more and more producers of Private label in Europe are turning their eyes to the Russian market. They see the developments as opportunities to enter an attractive new market.

However, it is crucial for any player to realize that offering Private Label cannot be an opportunistic tactic but must fit into a long-term view on the market and an integral part of the company strategy.

IPLC has been active in Russia since 2014 and supported both local manufacturers and retailers in their private label strategy and implement best practice. In order to support them even better, IPLC has opened an office in St Petersburg.

If you want to learn how we can support your company, please contact:

Maria Kogan, Associate IPLC in the Russian Federation
You can visit her profile on the IPLC website

Alternatively you can contact:
Koen de Jong, Managing Partner IPLC

Visit our website in the Russian language

Private Label suppliers should not miss out on in-market research

The Covid pandemic has severely restricted the ability to travel resulting in important consequences for Private Label suppliers.

Although market data remains available from the main providers, the crucial in-field research of new products, new initiatives and pricing has almost dried up due to the lack of ability to travel.

It is vital to keep abreast of developments in the markets in which Private Label suppliers export to. They need this to retain their understanding of their customers’ needs.

Most markets in Europe are characterised by fierce competition and constant change. Private label suppliers are expected to be on top of the latest developments and to pro-actively support their retail customers with insight and recommendations. Plus being able to put the market date into context.

With a local presence by means of a network of 10 offices in Europe and Russia, IPLC can provide fast and professional support. Our consultants are highly experienced in gathering information essential for the right strategy and decision making.

IPLC can currently provide the following support:

  • Retail structure, including market shares
  • Category analysis: an overview of all brands and private labels on offer
  • Product quality, pack size, price, number of facings and positioning
  • Manufacturer behind the private label product can quite often be identified
  • Private label market share by category and product
  • Photos of products, or samples purchased and shipped

The research described above can also be of great value to manufacturers looking for a new export market.

If you would like to learn more about our approach and its potential, please contact us. Alternatively, the IPLC partner in the relevant country can be contacted directly.

Paul Stainton joins IPLC

We are pleased to announce that Paul Stainton has joined the office of IPLC in the UK in the position of Partner UK.

Paul has worked for over 33 years in the buying departments of the Co-Op and Aldi in the UK, leading buying teams responsible for multi-million-pound turnovers.

As the very first buyer at Aldi UK, Paul developed private label ranges from scratch across many ambient, frozen, chilled, and non-food categories. Managing performance in periods of unprecedented growth, he was responsible for supplier negotiations, category strategies and private label new product sourcing and design development.

“Private Label share in the UK has grown from 46.8% to 52.7% in the past 8 years. As one of the leading countries in private label innovation, the UK offers suppliers tremendous opportunity for growth. Having a deep understanding of retailer requirements in private label, I feel my knowledge and experience will be an asset to suppliers. I am delighted to join the IPLC and their team of international consultants”

Koen de Jong, Managing Partner IPLC:
“We are delighted to strengthen our office with this seasoned retail professional. The UK is the cradle of private label and virtually all strategic innovations originated in this market over the past few decades. Paul experienced the enormous development up close and developed sustainable relationships with suppliers from all over Europe. We are on the eve of major changes in the market and with a strong presence in the UK we hope to assist our clients even better than before on relevant issues”.

Merger and acquisition activity in Private Label manufacturing

Private Label and Contract Manufacturing Preview: Affordability and Diversification Drive M&A | Mergermarket | 9 December 2020
By Barbara Pianese

This is an overview of Mergermarket proprietary intelligence in the private label and contract manufacturing space in the past four months, featuring existing opportunities in the market.

It is a known fact that in times of economic crisis, consumer confidence declines and purchasing attitudes shift towards affordability and financial conservatism. The severity and length of the current COVID-19 pandemic has provided renewed appetite for private label consumer products among consumers, many of which are likely to stick to these products once the economy recovers.

The private label space is very fragmented, with many businesses, both in the food and non-food sectors, of a small size and family owned. The very nature of these businesses means that they experience a lot of competition to win supply contracts from retailers that are becoming increasingly bigger, Koen de Jong, Managing Partner of International Private Label Consult (IPLC), said. This is a case in point in the grocery space, where further consolidation among grocery retailers has led to increasing competition among private label manufacturers, particularly as the former tend to minimize the number of suppliers they use to increase their efficiency.

The growth the category is experiencing, coupled with such fierce competition is, in turn, spurring a new consolidiation wave among private label players, as they look to further consolidate their market gains and diversity and increase the quality of their offering.

Not all categories within private label have reached the same level of consolidation, Sectors like cereals, coffee roasters, soft drinks, frozen vegetables and laundry dertergents are more consolidated than confectionary, hand-held ice cream or pet food, according to de Jong.

To read the full article

Brexit will become a reality

The United Kingdom continues to respect all European rules and retains access to the internal market and to the Customs Union now that it is still in the transition period.

Currently, the United Kingdom and the European Union are engaged in negotiations on their future relationship, in order to determine in particular the trade rules that will apply at the end of the transition period on December 31, 2020.

Whatever the outcome of these negotiations, the end of the transition period will have consequences for citizens and economic actors, whether an agreement on the future relationship will be concluded or not. Therefore, the end of the transition period should now be anticipated.

For its clients IPLC consultants have put together a list of Government Departments, Associations and Institutions where useful information is offered to prepare for the planned exit of the United Kingdom from the EU.

Many of the websites link to webinars that address key questions from manufacturers, suppliers and other industry stakeholders. Among the topics are new formalities and control processes of those using the North Sea routes between UK and EU ports and the transport infrastructure of the Short Straits.

Carin van Leeuwen joins IPLC

We are pleased to announce that Carin van Leeuwen has joined the office of IPLC in the Netherlands in the position of Partner Benelux.

Carin has worked for many years in various commercial positions with the leading producers in the dairy industry, holding responsibility for the negotiation of large private label contracts with national retailers.

For a period of 7 years (2012-2018) she was Unit Manager at Jumbo Supermarkten. She held responsibility for almost all product groups covering fresh, ambient, frozen and non-food. She also spent a few years managing the private label department.

“Within the supply chain of fresh categories transparency and provenance are at the base of quality and sustainability. Whilst working at the retail side after my 24 years experience in the dairy industry I considered that my knowledge and experience would be very useful to support suppliers in fresh categories. Therefore, I am delighted to join the IPLC and this team of international consultants”

Koen de Jong, Managing Partner IPLC:
“Carin has gathered a wealth of private label knowledge covering both manufacturing and retail, which will add true value to our team. Experience of working on both sides of the supply chain has taught her how to build successful and lasting partnerships. IPLC will continue to expand our pool of private label professionals with extensive knowledge and experience in retail and manufacturing.”

Surprisingly late response from UK retailers

The Big-four UK retailers have seen an erosion of their market share from 75.5% in 2007 to 66% in the latest Kantar data. This equals a value loss of over £13bn, with Aldi and Lidl gained over £12.3bn, mostly in Private Label.

In March this year Tesco launched its ‘Aldi Price Match’ campaign. It stated that prices on hundreds of comparable Tesco and branded products were to be matched against prices in Aldi.

It strikes me how surprisingly slow this response was for the retailer that has been at the forefront of private label innovation for decades. One would expect the German market could have served as a source of inspiration for Tesco much earlier.

When Tesco launched Farm brands (such as Boswell, Redmere and Rosedene) their share stood at 28.1%, when they launched Exclusive brands (such as Stockwell, Eastman’s and Hearty Food) it was 27.4%. Latest Kantar put them at 26.7%, so since Farm brands a share loss of 1.4%.

Aldi over the same date period went from 6% to 8.1% only since Covid-19 have they dropped to 7.8%. At IPLC we believe that Covid-19 has had more impact on Aldi (as shoppers avoided smaller store format stores due to social distancing) than Tesco’s brand strategy.

In Germany, the homeland of Aldi and Lidl, retailers such as Rewe and Edeka have been successfully fighting back with a disruptive approach to own label since 2009. They upgraded or replaced their value ranges to standard tier. Other EU retailers such as Albert Heijn, Jumbo, Système U and Coop Italy have subsequently followed suit.

Last year I wrote (The Grocer, 6 April 2019) that there was every reason for UK retailers to take the discounter ‘supermarketification’ threat more seriously. The grocery market is changing at a phenomenal pace as younger shoppers are becoming less loyal to brands.
Tesco’s approach is half hearted as the 3-tiered strategy remains in place whereas EU retailers have or are increasingly ditching their value labels. Tesco may match the price but this tactic can simply be eliminated by Aldi with an increased offer of Everyday Essentials (lower quality products).

The point is that today’s savvy shoppers will not be fooled by cheap products that do not deliver. They demand low prices and good quality and right now they are more likely to get both at the discounters.

The Price Match campaign now includes 500 own label and branded products and is expected to trigger a price war in the UK. In view of the expected economic downturn resulting from the Covid pandemic as well as uncertainties surrounding Brexit, the UK is preparing for challenging times.

With its switch to everyday low pricing (EDLP) Tesco understandably anticipates reduced consumer budgets and puts huge pressure on its suppliers to lower their prices (The Grocer, 22 May 2020). Hopefully, they will also make sure to match Aldi’s product quality at the same time as that might even be a bigger challenge. Time will tell whether this new approach works to stop the further rise of the discounters in the UK.

By: Koen de Jong, Managing Partner of IPLC and author of the book The Private Label Revolution (2019) and Richard Harrow, Partner IPLC UK.

IPLC opens an office in the Nordics

IPLC has opened a new office to expand its consulting activities in the Nordic Countries. Jonas Kærgaard Petersen will be joining IPLC as a partner for Denmark, Sweden, Norway and Finland.

Jonas has a strong international background and completed a career of almost 15 years at the Nopa Nordic Group, a Danish private label manufacturer in the household cleaning and personal care sector. With his experience, he feels fully comfortable with all aspects involved in private label in the Nordics. Additionally, he has hands-on commercial experience in oversees markets such as Asia, the US and Australia.

Jonas has a keen interest in topics related to sustainability and since 2007 he has been at the forefront of promoting sustainability in private label manufacturing. Over the years, he has gathered substantial experience in product innovation and has created profitable sustainable solutions that have resulted in award-winning products.

Recently, he has worked as an independent consultant on projects in various categories such as diapers, canned fish and baby food.

“Whilst continually evaluating the market during my independent consulting journey it was clear IPLC stood out as the organisation providing the most extensive services within the private label industry. I closely follow the latest trends and developments in sustainability and enjoy reading reports and keeping track of consumer behaviour, packaging and plastic reduction.
With my experience and deep understanding of the Nordic markets, I will seek to support retailers, private label manufacturers and suppliers. I believe my experience enables me to navigate them to success.”

Koen de Jong, Managing Partner IPLC:
“We are proud to include such an experienced expert as Jonas in our team. The Nordic countries have a rather complex and fragmented retail structure but there is plenty opportunity for growth in private label, notably at the sustainability end of the market. On the other hand, we can learn a great deal from the experience that Jonas will bring to our team. We shall continue to further expand our pool of private label professionals with a vast know-how and experience in retail and manufacturing.”

Brian Sharoff, President of the PLMA passed away at the age of 77

On Saturday 23 May, after a brief illness, Brian Sharoff passed away at the age of 77. As president of the Private Label Manufacturers Association, he has had a tremendous impact on the development of Private Label around the world.

I first met Brian not long after I had participated in one of the earliest versions of the PLMA show back in 1989. At that time, no more than 40 participants only partly occupied one hall in the Amsterdam RAI exhibition centre. Each having the same one-size-fits-all booth of no more than 16 square metres. Those were the early days where pioneers in the private label industry gathered to meet with their retail clients.

So much has changed in the world of Private Label over the past three decades. Without doubt, Brian has been a driving force behind the spectacular growth of retailer brands.

The annual PLMA exhibition in Amsterdam has grown into the epicentre of private label trading for the industry. Today, on 26 May, this year’s show would have started at the RAI if the world had not been hit by the coronavirus crisis. The event would now have had more than 2,800 participating manufacturers, occupying every single hall of the 116,200-square-metre RAI complex.

Brian Sharoff was a true visionary and undoubtedly had a tremendous impact on the development of private label that took the world by storm. He considered the PLMA to be his life’s work and could react strongly when he thought he had to protect the interests of his association.

With relentless energy and passion, he travelled the continents to develop the PLMA into a global organisation. In addition to the annual exhibitions in Europe, the United States and China, the association initiated round-table conferences and education programmes to enhance executives‘ understanding of retailer brand management.

There is no doubt that the organization could not have grown into what it is today without Brian’s inspiring leadership. The entire private label industry is deeply indebted to him and Brian deserves a statue for what he accomplished.

Country market update in view of the Corona crisis

In view of the impact of the Coronavirus COVID-19 crisis on the Food Supply Chain, our consultants have prepared a report to share their personal observations in their respective markets. The attached document shares an impression of their perception of the situation.

We acknowledge this report is far from complete and is a snap shot at the time of writing. It however may allow you to obtain a quick assessment of the situation in 9 different EU countries and the impact on the Food Supply Chain.

Italy (Paolo Palomba and Stefano Ghetti)

Italy, as it unfortunately has appeared is ahead of all other European countries. It took at least two weeks of continuous information (similar to war bulletins), communication, campaigns and increasingly stringent government decrees (including police checks), to create awareness and disciplined behaviour by citizens for the seriousness of the situation.

In the meantime measures were defined by means of 3 Decrees by the President of the Council of Ministers (DPCM) issued within ten days. These have put an absolute ban on all gatherings and other social closeness. Even interpersonal contacts between two people are recommended to be avoided.

Today one can leave his home only for strict occasional needs such as grocery and drug shopping, health issues or serious reasons of work. This ruling excludes doctors, health care professionals and workers in crucial sectors. Visiting or running a store is one of the few risk activities allowed outside the home. The owner or manager of the store is responsible to provide safe conditions to everybody.

Last Tuesday a discussion was started among retailers and the government to reduce opening hours of supermarkets and to sell exclusively food and detergents (all other non-food products to be prohibited).

About 98% of all Italians receive information about the health situation at least once a day, 86% even more than once. Whilst two weeks ago only 17% of the population said they were concerned about the situation, it turned to 25% a week ago. Now it is 58%.

The restrictive measures by the DPCM of 9th March were adhered and considered appropriate by 58% of the Italian population. Only 5% consider the measures exaggerated.
Of all interviewed 73% consider the measures taken so far by other countries to be too mild.

The Italians seem to trust their institutions and from our surveys it appeared that people have a good civic sense and are willing to make a sacrifice. This counts for both their social lives and for making an effort for the greater cause (e.g. work).

The official quarantine has a significant impact on consumer adoption of other measures to prevent contamination. To name a few examples: washing hands are having been in a crowded area or public place (90% vs. 11% last week), avoiding public and crowded places (88% vs. 32% last week), avoid travel (72% vs. 37% last week), avoid use of public transport (69% vs 31% last week), use of disinfectants (65% vs. 17% last week) and cover your mouth with a handkerchief while coughing or sneezing (65% vs. 18% last week). Although on the rise, the use of mouth towels is still limited to less than 1 in 4 Italians (24% vs. 9% last week).

Of the respondents 40% said they had reduced the frequency of visits to the supermarket (vs. 26% last week). For grocery stores this was 38% (vs 25% last week) and for local markets 63% (vs. 36% last week). At the same time shoppers seem to stock-up (28% vs. 12% last week). On-line shopping exploded, especially in-home delivery + 82,3%.

We see three main reasons that have led to the strongly increased sales in recent weeks:
Irrational effect of hoarding products as an irrational response to uncertainty (shelf stable basic categories such as pasta, rice, tomato preserves, tuna, flour, etc.) triggered by each time a new announcement of restrictions was made.
Prevention and health effect resulting in an increase of sales in the personal care category and pharmaceuticals. Also vitamin products and dietary supplements demonstrated a general increase (+17.1%) as well as fresh/ready-to-eat fruit (+10.1%).
The reduction of out-of-home food consumption due to the closure of restaurants, bars, school and business and sport canteens. Food in out-of-home in Italy account for 37% of total food consumption.

Portugal (by Robertus Lombert)

Schools closed as of this Monday, restaurants are only allowed to use one-third of their capacity (i.e. capacity of 90: only 30 persons are allowed in). Only a limited number of people are allowed to enter hypermarkets and supermarkets at one time. Working from home is strongly recommended. Many companies have closed their offices and require their employees to work from home. More and more stores are closed and shopping centers allow the store-owners only limited opening hours.

As schools are closed, parents have to take care of their children. In families with children under 12 years of age, one of the parents is allowed to stay at home and entitled to receive two-third of their income. On-third to be paid by the government and one-third by the employer.

The border with Spain is practically closed, only 9 posts are let open to transport of goods.

Retailers have reduced their opening hours and shoppers stand in line to enter the store. In general people seem to prepare themselves to stay at home for a longer period of time and the hoarding of products is common. As a result some items are out-of-stock, notably at the end of the day. Most employees wear protection such as gloves and masks.

The APEC (Portuguese Retailer Organization) assures there will be no lack of goods in the stores. Temporarily some products may be out of stock but there will be no lack of food.
On-line demand has spiked. However, as sales via the internet in Portugal is still relatively small, retailers lack the capacity to respond. Home deliverers do not enter the home but
simply leave the goods at the doorstep. Payments are settled as much as possible on-line, in some cases on-line deliveries can not be paid in cash anymore.

Retailer Auchan has an on-line queue and limits the time to buy on-line to 30 minutes for each shopper. Pingo Doce has announced that due to high volumes ordered on-line they are unable to deliver within one day.

United Kingdom (by Richard Harrow)

The measures taken by the UK Government are changing almost daily. Yesterday we moved into a position where they recommended that people stop going to bars, restaurants and theaters. Since then lots of theaters have announced they will close.

We are looking to people over 70 going into self-isolation for up to 12 weeks. If a member of the family shows symptoms, then self-isolation for 14 days for all family members.
Schools are not closed yet, this is because this would put a strain on parents who may work in social care, hospitals etc. We think however they may move to bring the Easter Holidays forward.

Government have encouraged those that can work from home to do so. Pictures of London in the rush hours showed Waterloo station deserted. At the BFFF (British Frozen Food Federation) we have moved to home working for the whole team from today.

Food sales have rocketed with volumes above Christmas trading. One retailer told me their sales last week were 29% above plan. Today they said sales on track to be nearly 45% above plan. Supermarkets now putting limits on some products how many a customer can buy on one visit. On-line retail is struggling with booking slots for home delivery. Stories have it that people cannot get slots for 3 weeks.

Ocado is struggling because they hold less stock than a traditional retailer, so have sent out a plea to their suppliers to prioritise them. Key categories that have been hit are toilet rolls, canned goods and dried pasta.

Frozen Food has also seen a jump and sales of freezers has jumped by up to 200%.
12 retailers issued an open letter to consumers saying no food shortages, empty shelves are due to consumers panic buying. BFFF (British Frozen Food Federation) has just

launched a platform to connect out-of-home manufactures with retailers.

CEO’s of the major retailers now talking directly with the Government and discussion around suspending competition laws so they can work together. Issue with stocks is most retailers have reduced stock levels in stores and distribution centres. This means new stock needs to come in from manufacturing. This is taking time.

Retailers now putting in place limits on how many of an item a consumer can buy on one visit. One distribution company told me at Christmas they employ 20% more staff to cope with the volume, they run RDC’s for a retailer. This means in the short term they are struggling to get stock out to stores, for every 3 cases sold in store they can only replenish 2.

At the moment we are not seeing any impact in terms of production although some companies are now concerned about getting raw materials from companies on shut down.

Restaurants, bars and cafes are really concerned over the next few weeks.

Non-food may already have been impacted by the situation in China due to earlier issues. Combination of factories not working, ports closed and containers out of position. Soap and hand sanitiser now is in short supply. Strong advertising campaign to encourage hand washing.

France (Remy Medina)

A €45Bn in government funds will be made available to support companies and their employees. Payment of social and tax charges are allowed to be postponed.

Last Monday a general meeting by all CEO’s in French retailers was organised to reassure the availability of products urging people to refrain from hoarding. Originally measures were taken to restrict the number of shoppers into the store at the same time and let them in gradually to avoid a rush and even fights in the stores. This has now been abandoned to avoid people queuing outside. Some stores open during the night for replenishment and retailer employees are asked to cancel their holiday to assist.

Special opening hours are offered to the elderly so that they can shop at ease and with less risk of close contact. Franprix and Monoprix offer free delivery to the elderly for a basket of €30 containing all the necessary products (€40 for organic basket and €45 including Gourmet products).

Promotions and large volume discounts are limited as this would put the supply chain under even further pressure. On-line ordering and deliveries as well as click-and-collect orders have doubled.

The ANIA (Association Nationale des Industries Alimentaires) has urged their members to focus on production of the 20% of the products that generate 80% of their volume. Players

in the food supply chain are appointed as a priority sector in the economy. Therefore, employees are excluded from restrictions to move and are allowed to freely travel to and from work. Food safety remains at the heart of food production and no additional measurements are required from producers. Manufacturers are obliged to apply strict employee safety procedures and to sharpen cleaning procedures.

Ireland (Malachy O’Connor)

All St Patricks Day parades were cancelled, schools and creches closed since last Thursday and gatherings of more than 100 people are banned.

Social distancing guidelines were introduced but are difficult for pub owners to enforce. As a result all pubs were forced to close since Monday, creating 50,000 unemployed to add to 20,000 creche workers and 70,000 other retail staff. Government has not introduced a fully enforced lockdown (as per Italy and Spain) but most non-grocery and pharmacy outlets are voluntarily closing (drapery stores, hotels, cafes etc). ‘Retail Excellence Ireland’ anticipate a further 200,000 unemployed by the weekend. Government will need to take further measures to protect both employers and employees.
People are advised to work from home if possible and keep 2 meter distance in public. Effectively each family is in hibernation and limiting unnecessary contact. A significant increase is expected as testing is ramped up but the national effort is being put into ‘flattening the curve’.
Stocking up has been happening since weekend of 28/29 February with retailers noticing uplifts on canned and dry goods and sanitisers. The announcement last Thursday of school closures immediately prompted panic buying with most shops almost completely emptied on Thursday, Friday and Saturday. Retailers ordering massive quantities from supply base across the range. Retailers have been initially slow to communicate reassurances that we will not run short of food. People do not trust the politicians and need to hear the message from other sources.

As of today, Supermarkets are announcing opening hours to allow elderly and family carers to shop without big crowds. For example, Lidl have announced 9-11am every day. Tesco announced Monday, Wednesday and Friday before 09:00am. Tesco are the main on-line grocer in Ireland and slots are maximised.

Spain (Luis Sobreroca)

The state of alert was declared on Saturday 14 March to address the health emergency caused by the Coronavirus COVID-19. It concerns the entire national territory and was declared for a period 15 days by a royal decree. It can and most likely will be extended. The competent authority for the state of alert shall be the Spanish Government.

Since yesterday all country borders were closed and only Spanish people are allowed to enter as well as trucks.

Citizens are only allowed to travel on public roads to purchase food, pharmaceuticals or basic necessities. Also travel to the workplace, professional business or to assist the elderly, minors, persons with disabilities or particularly vulnerable persons.

Public transport is not closed but operates less frequent (50% less) in order to reduce movement of people.

Only food retailers, press sellers, tobacco, and pharmacies are allowed to remain open. All other shops are closed. The authorities in charge must ensure a continued supply of food: both production and distribution.

Major retailers such as Mercadona, Carrefour, Dia and Lidl have announced new timetables in order to limit the capacity of their shops and require shoppers to keep a safe distance. In some cases cashiers are protected by methacrylate screens and wear vinyl gloves.

Some large operators will seek to compensate the loss of sales by activating the on-line sales channel. Companies such as El Corte Inglés, Media Markt, Fnac, as well as those who dominate the textile business, have announced they will continue to provide this service despite the fact their physical stores remain closed.

Spanish households have begun to change their buying behavior following the COVID-19 crisis, based on the study of shopping and consumption habits presented by consumer panel consultancy Kantar.

In week of 24 February to 1 March there was a sharp increase of large consumption spending of FMCGs (+113%) compared to the weekly average of the previous two months. Following the announcement of extraordinary measures on 10 March consumption increased by 154% and soared to 180% on 11 March. The increase in consumption is seen across all distribution channels.

Sales in hypermarkets and supermarkets soared to 160% compared to daily average.
In proximity stores it even went up to 190%.

Belgium (Tony de Bock)

In Belgium, the government ruled restaurants, cafés and schools to close as of last Saturday. Shops selling electronics, white goods, clothing, sportswear and other non food are allowed to remain open from Monday to Friday. Nevertheless, many decided to stay closed. So far 30,000 companies have applied for technical unemployment, it concerns approximately 300,000 employees.

Over the past few days there has been a massive influx to the food stores, resulting in empty shelves. As of today, Delhaize only allows a maximum of 150 shoppers in the store at the same time. Between 8am and 9am, they specifically cater for 65+ customers. Colruyt has sent 1,000 employees from the head office to the stores to assist. In addition students are asked to help. On-line sales have been temporarily stopped due to excessive demand.

Aldi only allows a maximum of 50 shoppers at the same time in most of their stores.
There is a concern that the supply of raw materials and packaging from abroad may run short. In some cases it appears difficult to find technicians to come in in view of the call to keep a distance and avoid groups.

The expectation is that we will go to a total lock down later this week. In order to avoid anxiety it is important to keep the medical and food sectors going.

Germany (by Ulrich Helm)

The country is closed. All activities are disconnected. People should stay at home and traveling within Germany and to abroad is prohibited.

All stores are closed and only supermarkets, pharmacies and drugstores are allowed to remain open. Schools, universities, kindergartens, cinemas, theaters and the like are closed. The same holds true for bars, clubs, discos and sport parks.

Many consumers have hoarded everyday products resulting in out-of-stocks for shelf stable food, toilet paper, soaps and disinfectants in some of the stores. However, manufacturers and retailers have guaranteed a continued supply of all necessary products. There are considerably less people in the streets and cities and there is little traffic, less trains and busses.

The Netherlands (Koen de Jong and André Michel)

With a rare directly televised speech Prime minister Marc Rutte addressed his citizens on Monday. He urged for togetherness in these difficult times and warned that the situation will get worse before it will improve. The Dutch government seeks to achieve a controlled expansion of the disease to ‘flatten the curve’.

Schools, universities, restaurants, cafés, sport canteens and the like must be kept closed. People should refrain from traveling and be physical social contact restricted to a minimum. The new buzz word is ‘social abstinence’.

In view of the Corona crisis many companies including retailer Albert Heijn work in 2 team- shifts. It is all-hands-on-deck to secure an uninterrupted and smooth food supply. Head office staff as well as former employees are occasionally involved in working in the stores.

Many categories have been temporarily out-of-stock due to excessive demand. Deliveries to the stores simply could not match the volumes sold to hoarding shoppers. Retailers stress there is plenty on stock and therefore no need for hoarding. The supply of fresh fruit and vegetables to the stores is favored over sweets and snacks. This may be the reason why the crisps category was completely sold out in my local Albert Heijn store.

Reduced opening hours are not considered as trucks can only unload if the store is open. Also a restriction of the volume of product a shopper is allowed to buy is not an option. This to avoid cashiers having to enter discussions with shoppers. Usually bananas is the number one fruit item sold, strangely enough it is now kiwis.

Last Friday Jumbo’s daily turnover was 65% higher than usual, even higher than the week prior to Christmas.

On-line food retailer PicNic explains on its website that due to excessive demand delivery delays may occur. Groceries will are no longer be carried into the homes but be put in front of the door whilst the deliverer keeps a 1.5m distance. Return bottles will be no longer be accepted.