IGD Presentation at IRF 29.09.10 - FINAL
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© IGD 2010 Presentation to Indian Retail Forum, 2010 Nick Everitt, Head of Market Intelligence, IGD Wednesday 29 th September 2010
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Transcript of IGD Presentation at IRF 29.09.10 - FINAL
© IGD 2010
Presentation to Indian Retail Forum, 2010Nick Everitt, Head of Market Intelligence, IGD
Wednesday 29th September 2010
© IGD 2010
• Understanding the food and grocery industry around the world
– Retailing
– Supply Chain
– Shopper Insight and Category Management
• Delivered via online, conferences, customised training
• Over 700 members
• Quality, detailed research based on primary research
– Board level links with retailers
– Regular face to face meetings and local store visits
– Team of 30 in-house analysts with industry experience:
© IGD 2010
Visits to 26 markets so far in 2010…..and growing
© IGD 2010
Agenda
• The evolving global retail landscape
• Retailer strategies: playing to win
• Walmart, Tesco and Carrefour in perspective
• Summary
© IGD 2010
Also true for grocery retail performance
Source: IGD Research
2010 grocery retail growth figures (local currencies) - Top 25 grocery retail markets
© IGD 2010Source: IGD Research
Who will be the grocery ‘powerhouses’ in 2014?2006 2010F 2014
FRan k
Country €bn Rank Country €bn Rank Country €bn1 US 612 1 US 638 1 China 7612 China 328 2 China 529 2 US 7453 Japan 297 3 Japan 345 3 India 4484 France 206 4 India 279 4 Japan 360
5 India 190 5 France 205 5 Russia 3226 UK 188 6 Russia 186 6 Brazil 2847 Germany 150 7 Brazil 185 7 France 2288 Italy 127 8 UK 170 8 UK 1989 Russia 116 9 Germany 160 9 Germany 16810 Mexico 112 10 Italy 130 10 Indonesia 167
2,326 2,827 3,681
© IGD 2010
Strong profitability of European retailers
Source: Barclays Capital
© IGD 2010
……But its becoming harder to turn the wheel
Source: IGD Research
Lower retail prices
Increased customer trafficReduced costs and
expenses
Higher sales volumesImproved operating efficiency
Consumer downturnCost
increases
Price increases
“Low price productivity loop”
© IGD 2010
Reduce stockholding
Source: FCD, Carrefour Analyst Presentation (June 2009)
Average number of stock holding days in 2009
© IGD 2010
Price and promotional activity
Understanding the shopper
Sustainability
Greater strategic alignment and long-term joint business planning
Supply chain efficiency and process improvement
New product launches
Balance sheet KPIs such as cash flow and inventory
In the next three years, which three areas will become MORE important in your trading relationships?
Source: IGD Survey of 118 International Manufacturers and 22 Global Retailers
© IGD 2010
Vertical integration
Source: IGD Research
Packaging and private label operations Store based production
Central kitchen
© IGD 2010
Reduce number of items stocked
Source: Morrisons and Carrefour Analyst Presentations (June 2009 and September 2010 respectively)
© IGD 2010
Private label growing in many markets
Source: PLMA Private Label Factbook 2009, IGD estimates
© IGD 2010
Creating a simple and clear offer (Carrefour)
Source: Carrefour
© IGD 2010
Evolution of ‘good, better, best’
Source: Mypbrand, IGD Research
© IGD 2010
Carrefour reinventing the hypermarket
Source: Carrefour
© IGD 2010
Store segmentation
Targeting restaurant spend
Blurring of channels
Small formats targeting shopper missions
Source: IGD Research, Tesco
© IGD 2010
Retailers entering fourth phase of global growth
No.
of c
ount
ries
of o
pera
tion
Early Exploration
Source: IGD Research
Rapid Globalisation
Cautious Expansion
Retrenchment
Presenter�
Presentation Notes�
Before I do that it is worth of course looking at how the key international operators are progressing in terms of international expansion This chart shows the number of markets that Walmart, Carrefour, Tesco and Metro are now in, and how this has changed over time Currently entering a fourth phase of internationalisation Stage 1 – Early exploration� Stage 2 – Flag planting in the 1990s up until the turn of the millennium� Stage 3 – Assessment of previous expansion, and in some cases a period of retrenchment as retailers identify not able to get to No.1 or No.2 position without significant investment e.g. Walmart out of S.Korea and Germany� Stage 4 – More stable international portfolio means retailers open to entering new markets once again e.g. Walmart, Tesco and Carrefour into India, but adopting a more cautious approach (still questions hanging over them regarding the profitability of their international businesses�
© IGD 2010
Key developments: Walmart
Source: IGD Research, Walmart
© IGD 2010
Key developments: Carrefour
Source: IGD Research, Carrefour
© IGD 2010
Key developments: Tesco
Source: IGD Research, Tesco
© IGD 2010
What can we expect for India?
• Focus on using local market knowledge and leverage JV
ties
• Strong focus on supply chain and operational efficiencies
• Tailoring the store format and introducing new solutions
• Focus on the shopper and meeting their needs
• Use of private label to reinforce value messages
• Developing strategic partnerships with suppliers for the
l t
© IGD 2010
For more information…
• Please contact– Nick Everitt, Head of Market Intelligence,
IGD– +44(0) 1923 851 972– [email protected]
• Visit www.igd.com
• IGD’s Retail Analysis site www.igd.com/analysis
