Europe's Top 30 Grocery Retailers in 2002

by M+M Planet Retail

 


COMBINED MARKET SHARE OF ALMOST 70% FOR EUROPE'S TOP 30 GROCERS

In the last few years, concentration in the European grocery trade has increased: in 2001, Europe's 30 largest grocers had a combined market share of 68.5%, compared with only 51.5% in 1992. This development has been at the expense of small and medium-sized retailers, a very large number of which were taken over by other retailers, or went out of business as a result of tougher competition. And there is no end in sight to this concentration process: in just a few year's time, Europe's TOP 30 players will capture between 80% and 90% of the European grocery trade.

THE TOP 30 INTERNATIONAL GROCERY RETAILERS IN EUROPE, 2002

 

Group

Home country

Net sales
Europe
2001
(EUR mn)

 

Gross
sales
Europe
2001
(EUR mn)

 

Share
of food
sales
(%)

Sales in home market
(%)

Foreign sales in Europe
(%)

   1

Carrefour (EU)

F

56,479

 

70,502

e

70.5

63.6

36.4

   2

Metro (EU)

D

48,292

 

54,799

e

49.5

58.7

41.3

   3

Rewe (EU)

D

37,540

 

41,375

e

73.5

79.8

20.2

   4

Tesco

GB

35,765

 

38,867

 

85.9

89.8

10.2

   5

Intermarche

F

31,900

 

34,741

e

82.4

74.6

25.4

   6

Auchan (EU)

F

24,500

 

32,190

e

74.8

71.5

28.5

   7

Edeka (EU)

D

28,035

e

31,000

e

84.7

91.5

8.5

   8

Aldi (EU)

D

27,300

e

30,079

e

84.3

71.8

28.2

   9

Ahold (EU)

NL

21,800

 

27,049

e

90.7

41.3

58.7

 10

Leclerc (EU)

F

21,500

e

26,071

e

52.3

96.5

3.5

 11

Sainsbury

GB

22,579

e

24,379

e

90.0

100.0

0.0

 12

Casino (EU)

F

17,306

 

22,643

e

76.2

95.8

4.2

 13

Schwarz (EU)

D

18,600

e

20,408

e

83.5

67.0

33.0

 14

Wal-Mart (EU)

USA

18,347

e

20,021

e

68.8

a

-

 15

Tengelmann (EU)

D

14,060

e

15,429

e

61.7

77.5

22.5

 16

Safeway

GB

14,029

 

15,187

e

93.0

100.0

0.0

 17

Migros (EU)

CH

12,800

e

13,356

 

64.1

98.9

1.1

 18

Marks & Spencer

GB

11,731

 

12,242

e

45.0

100.0

0.0

 19

El Corte Ingles (EU)

E

11,815

e

11,815

e

15.4

100.0

0.0

 20

Big Food Group (EU)

GB

11,201

e

11,772

e

92.9

99.7

0.3

 21

Systeme U

F

5,990

e

11,650

 

87.0

100.0

0.0

 22

Cora-L. Delh. (EU)

F

7,995

e

9,695

e

68.5

71.1

28.9

 23

Karstadt

D

8,015

e

9,250

e

12.0

100.0

0.0

 24

Coop Italia

I

8,140

e

9,193

 

87.0

100.0

0.0

 25

Coop Schweiz

CH

8,689

e

8,980

 

78.0

100.0

0.0

 26

Kesko (EU)

FIN

6,214

 

8,598

e

55.0

97.5

2.5

 27

Somerfield

GB

7,360

e

8,164

e

90.0

100.0

0.0

 28

JLP

GB

6,470

 

7,167

 

50.0

100.0

0.0

 29

Laurus (EU)

NL

6,401

 

7,148

e

88.5

71.1

28.9

 30

Morrisons

GB

5,946

e

6,296

 

95.0

100.0

0.0

 

Total Top 30

 

 

 

640,066

 

68.6

  market share

 

Others

 

 

 

293,039

 

31.4

 market share

 

TOTAL

 

 

 

933,105

 

100.0

 

 

a - home market: USA
Source: M+M Planet Retail - www.planetretail.net

 

THE TOP 10 MAINLY INCLUDE FRENCH AND GERMAN COMPANIES

To be amongst Europe's TOP 10, a grocer today needs annual sales of more than EUR25 billion. The TOP 10 mainly include French and German companies (except Tesco from the UK and Ahold from The Netherlands), and capture more than 41% of the market.


EUROPE IS A FORTRESS: WAL-MART IS THE ONLY NON-EUROPEAN PLAYER AMONGST THE TOP 30

While in the USA, Latin America and Asia, there are grocery retailers operating from all over the world (especially from Europe), the European grocery market is almost a closed shop: so far, Wal-Mart has been the only non-European retailer playing a significant role there. However, despite its huge cash flow (which is larger than some states' national budget), the US-based company has been unable to expand its portfolio beyond Germany and the UK. It has not exploited the potential offered by Eastern Europe, where it could have grown organically at a high speed. True, Wal-Mart's takeover of Asda in the UK was a lucky strike, which should pay off eventually. However, the company is generating gigantic losses in Germany, and the management's announcement that Wal-Mart would break even there by 2003 is probably unrealistic. It is, therefore, hard to describe Wal-Mart's expansion to Europe as a success at this stage.


CENTRAL EASTERN EUROPE: METRO IS MARKET LEADER, TESCO AND AHOLD PLAY MAJOR ROLE

In 2001, three European grocers made significant progress in their internationalisation:

 

 

•  

Metro strengthened its position in Central Eastern Europe, and is now market leader in the Czech Republic, Hungary and Poland. In Slovakia, Metro is the second-largest player.

 

 

•  

Tesco has made considerable investments in Eastern Europe. With a total of 50 hypermarkets, the company is now the second-largest hypermarket operator in the region, after Ahold (which has 52 hypermarkets).

 

 

•  

Ahold has clearly improved its store type portfolio in the Czech Republic and Poland, with Albert now being its only supermarket banner. In addition, the company is increasingly focussing on its Hypernova hypermarkets, not only in the Czech Republic and Poland, but also in Slovakia (market entry in December 2001).





SOUTH EASTERN EUROPE: WESTERN MULTIPLES ARE GETTING MORE INVOLVED

After Poland, the Czech Republic, Slovakia and Hungary were long the Western multiple's main targets for international expansion. However, retailers are now increasingly moving into South Eastern Europe as well. In just a few year's time, this region, too, is expected to be dominated by large Western chains.


RUSSIA: EUROPE'S GROCERY RETAILERS ARE GETTING STARTED

By summer 2003, Auchan intends to open three hypermarkets in Moscow. Edeka subsidiary AVA is planning to launch a shopping centre near Moscow, featuring 35,000mē sales area, by summer 2002. Since November 2001, Metro has been operating two cash & carry outlets, with further openings scheduled to take place this year. It looks as if in the near future Greater Moscow with be the main target for Western multiples wishing to enter Russia, although the St. Petersburg region, which is also highly developed, is likely to follow soon. If Western Russia continues to stabilise economically and politically, the country's grocery trade could develop similarly to that in Poland. If adapted to the local market, proven sales formats could be rolled out relatively quickly.


CASINO AND LAURUS: MERGER OF THE YEAR?
It is expected that by the end of May 2002, Casino will sign a contract to acquire a 38.6% stake in Dutch grocer Laurus. The deal will include an option for Casino to increase its stake to 51% by 2008. In order to do this, Casino would only have to buy the combined 12.4% stake currently held by a group of three Dutch banks. Casino's acquisition announcement surprised many analysts, given the difficulties that Laurus has faced over the past 18 months in The Netherlands, Belgium and Spain (the company generated a loss of EUR442 million in 2001). However, the main appeal for France's fifth-largest grocer is an immediate number two position in the Netherlands behind the mighty Ahold. Casino is planning a complete sell-off of Laurus' outlets in Belgium, with Spanish supermarket chain El Arbol to be divested after a period of restructuring. A takeover of Laurus should give Casino a rank amongst the TOP 10 European, as well as the TOP 20 global grocery retailers.

 

Top 30 Grocery Retailers in Europe: Gross Sales, 2001 (EUR mn)

e = estimate
Source: M+M Planet Retail - www.planetretail.net

 

 

 

Top 30 Grocery Retailers in Europe: Gross Sales, 2001 (EUR mn)

e = estimate
Source: M+M Planet Retail - www.planetretail.net

ONLY 12 OF THE TOP 30 GROCERS GENERATE MORE THAN 10% OF EUROPEAN SALES ABROAD

In terms of sales generated in European foreign markets, Ahold is the most international grocery retailer amongst the TOP 30, generating almost 60% of European sales outside its home market. Ahold is followed by Metro (41%) and Carrefour (36%). Meanwhile, German-based Schwarz group has caught up considerably, with one third of turnover now coming from outside Germany. This is not least due to its strong hypermarket expansion in Central Eastern Europe.

Only 12 of Europe's TOP 30 grocers generate more than 10% of European sales abroad. However, these companies (with the exception of Cora-Louis Delhaize and Laurus) are amongst the most significant and powerful retailers in Europe. They have got both the financial power and management know-how to expand their foreign operations swiftly and eventually secure market leadership, especially in developing markets such as Central Eastern and South Eastern Europe. Finally, it is also worth mentioning that apart from the large multiples, there are also some small and medium-sized retailers which have been operating very successfully in foreign markets, albeit on a smaller scale. Examples include Dohle and Globus from Germany, Axel Johnson from Sweden, Dansk Supermarked from Denmark, and Reitan-Narvesen from Norway.


INCREASED INTERNATIONALISATION OUTSIDE EUROPE

Experience gathered in Europe has shown that there are enormous advantages for a retailer to get involved in developing markets early on. Latin America and Asia, in particular, have been in the focus of European grocers for some time. While Metro intends to strengthen its position in Asia (eg in India and Vietnam), Carrefour (which is now active in more than 30 countries) is targeting Japan. However, European players are also active in highly developed markets outside Europe, eg the USA, where Aldi, Delhaize Le Lion, Tengelmann (through subsidiary A&P) and Ahold are operating. Ahold's takeovers have made the Dutch business the second-largest foodservice provider in the USA. On average, European grocers are by far the most international grocers, and this is unlikely to change in the near future.

Related Articles from the Global Retail Bulletin

The top 30 international grocery retailers, 2002 -- Issue 66: 3 May 2001
The top 30 international grocery retailers, 2001 -- Issue 42 : 3 May 2001