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Adding value to spanish exports


2 DE agosto DE 2016

An analysis of the food retail industry, by format

Efraín Aureliano Sánchez

The supermarkets is the format that performed the best in spring of 2016, according to the most recent edition of the "Grocery Market Share" report, by Kantar Worldpanel.

This channel's good performance was driven by Mercadona and regional chains such as Consum, Ahorramás, Condis and Bon Preu, which continue to grow and gain share in their main regions, proving that regional formats are an option that consumers like, especially when purchasing fresh products.

The discount format, spearheaded by Lidl and DIA, also performed well. The two companies grew the most this year, achieving record market share in both cases.

The good performance by the supermarket and discount formats contrasts with a decline in popularity of the hypermarket and the specialist channel. The decline in market share in the former is due to the negative performance of Carrefour, Alcampo and Eroski between March and May; in the case of the latter, it's due to the war between modern retail chains, which nabbed some of the market share in fresh products, with the result that the channel that has been most affected by the growth of stores with small assortments is the specialist channel, where fresh product purchases have slipped by 4.1%.

2015 Performance

Data for the second quarter of 2016 maintains the trend seen in the other formats since 2015, when the discount and the supermarket formats registered the most growth, up 0.5 percentage points in market share, to 12.5% and 43.3%, respectively, according to Kantar Worldpanel. This growth maintains the trend already seen in 2014, when both formats performed favorably, although the discount format outperformed supermarkets (+0.6 vs. +0.4 percentage points).

If Mercadona counted as a discounter, the channel would have 35.2% of the market, making it the clear leader in Spain's food retail industry with a considerable margin, up 0.7 percentage points compared with 2014.

For the second year in a row, hypermarkets increased their market share, by 0.1 percentage points, the same as in 2014 when, following years of decline, the channel returned to positive territory.

Supermarkets were the indisputable leader in the food distribution sector in Spain, with a market share of 43.3% at the end of 2015. They're followed by the specialist channel (23.1%), hypermarkets (14.3%), discount stores (12.5%), traditional stores (1%), online stores (0.9%), cash & carry (0.8%) and other channels (4.1%).

Brands and channels

With regard to the food retail industry overall, market shares are the end of 2015 were as follows: 35.6% for private label, 37.9% for the main manufacturer and 26.5% for other manufacturers, according to Kantar Worldpanel.

In terms of formats, private label is the clear leader at supermarkets, with a market share of 40.9% (+0.5 percentage points compared with last year); followed by the main manufacturer, with 35.1% (-0.8 percentage points) and other manufacturers, with 24% (+0.3 percentage points).

In the case of hypermarkets, the leading manufacturer has the greatest share, with 57.6% (+1.4 percentage points), followed by private label, with 21% (-1.9%), and other manufacturers, with 21.4% (+0.5 percentage points).

Private label is the clear winner in the discount channel, with 61.3% of the market, although its share has slipped by 0.3 percentage points. The leading manufacturer has a share of 29.6%, also reflecting a decline (-0.2 percentage points), while the other manufacturers have 9.1% of the market (+0.5 percentage points).

As for cash & carry, the leading manufacturer has 55.1% of the market (+0.9 percentage points), followed by other manufacturers with 34.3% (-0.5 percentage points) and private label, with 10.6% (-0.4 percentage points).

Market penetration

Another interesting datum is market penetration, which reflects each format's penetration divided by the size of the Spanish population. Indubitably, supermarkets have the greatest penetration in Spain, reaching 99.4% of Spaniards in 2015 (in line with the 2014 figure). In second place is the specialist channel, which reaches 93.8% of Spaniards, a decline of 0.4 percentage points in 2015. The third format with the greatest penetration among Spaniards is discount, which reaches 85.6% of the population (+0.8 percentage points in 2015). In contrast, hypermarkets saw a decline of 0.4 percentage points in the last year, reducing their penetration to 80.8%. Cash & carry has 15.5% of the market, down 0.10 percentage points in the last 12 months.

These figures are intrinsically related to the number of points-of-sale each format has in Spain. According to Nielsen, there were 19,102 supermarkets in Spain at the end of 2015, up 3.1% with respect to 2014, when there were 18,527.

There were 5,743 discount stores in Spain in 2015, i.e. 190 more than in 2014 (+3.4%). At the end of last year there were 621 cash & carry stores, compared with 626 in 2014 (-0.8%). There were just 452 hypermarkets in Spain in 2015, up 0.6% with respect to 2014, when there were 449.

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