Discount Retail Chain Biedronka (owned by Jeronimo Martins) is ahead of Frisco.pl, Auchan and Carrefour. In one pandemic year, the online food retail market has changed dramatically. Biedronka became the leader of the e-grocery market, Lithuanian Barbora and several other retail chains appeared on it, and Tesco, which for several years was the largest player on this market, disappeared. Such rapid changes are also proof of how shallow the Polish e-grocery market is and how easily it can be shaken by a large player. The pandemic resulted in an increased demand for online shopping from consumers, which retailers responded efficiently. The e-commerce channel offer has been joined by such networks as: Biedronka, Żabka, Kaufland, and many other, also smaller chains. There are also new business models based on cooperation of the retail network with partners such as Glovo, UberEats and Everli. The results of the survey in "E-commerce" by NielsenIQ show that during the last year, 9% of people used FMCG purchases in the e-commerce channel. New consumers, and 20% of online buyers also declared that they had expanded their grocery basket with categories that they had not previously bought in this channel. Beata Kaczorek emphasizes that new retailers have strongly marked their presence in the online food trade market. After exiting the Polish market with the largest e-shopping network, Tesco, the leadership was taken over by Biedronka, debuting in this format, which entered this segment with the participation of Glovo. The results of the survey in E-commerce NielsenIQ show that 22% of Biedronka's services have been used in the last year. Polish buyers, which is the highest penetration among retailers in the e-commerce channel. This is due to the wide range of this network, but it also shows that the narrower product offer did not constitute a barrier to the use of this network, explains the NielsenIQ expert. And he adds, '"the entry of new wide-range chains may be of significant importance for setting new directions for the development of this channel, on the one hand extending the availability of this service, but also influencing consumer expectations. New suppliers often - due to the created business models based on a limited range, but also speed of delivery - respond to other consumer needs, such as: smaller purchases, shopping "for now". According to the expert of NielsenIQ, the presence of the leading discount chains in the e-grocery market may affect price competitiveness, but also consumer expectations in terms of the speed of delivery, which are key factors for choosing an online store today. The share of e-grocery in e-commerce has remained unchanged over the last few years and amounted to approx. 2.4 percent. In 2019, only about 0.8 percent of FMCG was bought online. Here pace is clearly picking up this roar. Although the entire market will grow fast, e-grocery is to grow even faster, by over 40 percent, increasing its share to 2.7% bringing it up to approx. 1.1 percent. Reaching approximately PLN 2.1 billion (US$560 million) in turnover compared to e.g. 2017 the market was just over PLN 1 billion (US$270 million). According to dr hab. Arkadiusz Kawa, director of Łukasiewicz, Institute of Logistics and Warehousing, estimates of 2-3 percent as a share for e-grocery in the total FMCG sales in Poland within 2-3 years (GfK Polonia, or even up to 5 percent). We are very optimistic because they assume the multiplication of the value of this market in a very short time, which can be very difficult. I estimate that by the end of 2022 this share will double and will amount to approx. 2%. See here for more: https://www.wiadomoscihandlowe.pl/artykul/biedronka-liderem-rynku-e-grocery-w-polsce-dyskonter-wyprzedzil-frisco-pl-auchan-czy-carrefoura

A funny thing happened on the way to Retailageddon: they forgot to tell some retailers. And while there’s no denying the past year has been especially harsh on much of the retailing industry when it comes to their physical store base, it has by no means been universal. In fact, certain sectors of the business are operating on the plus side of the ledger when it comes to opening physical stores. Opening Day Remarkably, so far this year the total number of store openings exceeds the number of store closings for the first time since…well, since a long time ago. Coresight Research, which does a very good job tracking such things, says that as of the middle of March, 3,344 new store openings have been announced in the U.S. versus 2,649 announced closings. Quite a change from last year when tens of thousands of stores closed, and openings were few and far between. As of the middle of March, 3,344 new store openings have been announced in the U.S. versus 2,649 announced closings. Quite a change from last year when tens of thousands of stores closed, and openings were few and far between. But here’s the thing: This resurgence in physical retailing is highly selective. Legacy sectors, like department stores and some big box businesses, continue to shut doors and reduce their footprints. Mass merchants have pretty much leveled off and are operating at retail statis. But two channels, off-price and dollar stores, are continuing to open new stores at a voracious pace, throwing it in the face of those who believe the future is only online. Add in some deep discount grocery players and even the physical retailing anti-Christ Amazon, and you get to the math that shows the net gain in stores. And what do all three of these channels, off-price, dollar and deep discount grocery, have in common, you might ask? Well, it’s pretty clear that the American consumer still loves a deal (real or perceived) and that V-tailing, that’s value retailing, just remember you read it here first, is an extremely compelling element of the marketplace. Shoppers are perfectly willing to bypass legacy retailers they have gone to for generations in pursuit of a bargain. Say what you want about the luxury market but when it comes right down to pulling out your credit card or hitting the buy button, the U.S. consumer is invariably going to gravitate towards the bottom. It may not be very pretty but it’s very real. Getting Physical Which of course raises the big question: Why? If no one disputes that ecommerce will continue to gain share and the pandemic has forever changed shopping patterns, how come some companies are plowing ahead with new stores? A couple of reasons top the list: As shoppers returned to visiting stores in person, the off-price channel was as strong as any in traffic counts. Financial results for companies like TJX, Ross and Burlington all confirmed that their in-store businesses returned quickly and in strength. These same retailers have little if any presence online and understand that they need more physical locations to continue to grow. Even if they are tiptoeing into ecommerce it is being done gingerly and with no real sense of urgency. The amount of available retail real estate and the prices beleaguered landlords are willing to charge to get tenants, makes this very much a buyer’s market for any company willing to sign leases for new space. The basic laws of supply and demand are driving this feeding frenzy. Lastly, and perhaps most intrinsically, one senses that off-pricers smell blood. As they watch department stores continue to deteriorate, losing stores and market share, they understand that they will be the prime beneficiaries of this shift in consumption, if they have the physical presence in place to take advantage of the situation. Opportunity Knocks The dollar stores and the deep discount grocery chain sectors have some of the same dynamics in play, though with a few twists. They aren’t feeding off dying department stores as much as providing a lower priced, real or perceived, alternative to traditional mass retailers in the general merchandise and food spaces. So, this is why we’re seeing plenty of new store activity even as some people were predicting the demise of virtually all in-person shopping. It can’t be overstated that while ecommerce continues to gain share in virtually all merchandise classifications, it still represents at best a quarter or even up to a third of overall retail sales. The rest remains, and will likely continue to do so for the immediate future, inside the walls, halls and malls of conventional physical retailing. Ten Brands on the Move So, here’s the latest tally of which retailers are expanding now and in the next year or two, focused on three sectors: off-price, dollar and deep discount grocery. TJX: The parent company to the country’s biggest off-price brands, TJ Maxx, Marshalls, etc., is expanding its store base across multiple nameplates. Long-term it has said it will nearly double the number of HomeGoods units from its current 800-store count to 1,500. Short-term, the company plans to open 76 stores in the U.S. across all its banners in its fiscal 2022. Ross Stores: The number-two off-pricer says it will open 60 new doors this year, 40 under its main banner and 20 under the dd’s Discounts name. That will come on top of its current 1,866 locations with Ross saying it still expects to top out to 2,400 Ross and 600 dd’s stores, though it didn’t specify the timetable. Burlington: Coming off strong performances the past few years, the chain plans to open about 100 new locations this year. It currently has about 750 locations but in announcing its 2021 plans it said it eventually expects to get to 2,000 stores. Ollie’s Bargain Outlet: The regional chain has announced 40 to 45 new stores for this year, on top of its current count of about 400 locations. Ollies has said in the past it could have more than double that number of stores in the years ahead. Dollar Tree: Compared to off-pricers the dollar stores are even more aggressive. Dollar Tree said it expects to open 600 stores this year, 400 under its namesake banner and 200 under its Family Dollar subsidiary. That’s up from 400 last year. This includes the first 50 of its combo-stores that co-locate both brands into one building, primarily in smaller, rural markets that may not be able to support full-size individual locations. Dollar General: Even more proactive, this dollar chain is expected to continue its recent surge with around 1,000 new stores this year. That’s on top of its existing count of about 16,000 locations. Both dollar operations, it should be noted, will close a number of store locations over the year that will impact their total counts. Five Below: Geared to younger shoppers, this dollar-format company says it plans to open between 170 and 180 locations this year, up from 110 last year. This will take its total count into the 1,200 range. Citi Trends: An up-and-coming operation focused on apparel, accessories and home goods primarily for African American and Latinx customers, it says it plans to open at least 30 stores this year and another 100 by the end of 2023, on top of its current 585 stores in 33 states. Aldi: The German based grocery discount retailer, which brought its deep discount grocery format to the U.S. way back in the 1970s but has only really stepped up its expansion over the past decade, said it will add 100 more American stores this year. That will take it to about 2,100 locations by year’s end. Lidl: Another import from Germany with a similar format and family heritage to Aldi. Lidl plans to add 50 stores here this year, taking it to close to 150 locations as it works to play catch up with its much later start on this side of the Atlantic. Do the Math So, not counting some other retail players that plan to open significant number of stores during 2021, Sephora, Ulta and Target to name a few, just the main off-price, dollar and deep discount grocery nameplates are talking about adding more than 2,100 stores before the end of their fiscal years (generally Jan. 31, 2022). That’s about two-thirds of the running count forecast so far and we all know it’s going to be a long year and lots of things can happen. All in all, not too bad for the Retailageddon, right? See here for more: https://www.therobinreport.com/off-price-is-dead-on-when-it-comes-to-store-expansion/

Discount Retail Chain Aldi Spain (German family owned) will begin works during the first half of this year to expand its logistics platform located in Masquefa (Barcelona) by more than 13,000 square meters. This warehouse currently has an area of ​​29,640 meters, so after the expansion, which is expected to end in early 2022, it will have more than 45,600, as reported by the discounter today. The works include the creation of 7,450 square meters of cold rooms and the installation of photovoltaic panels that will generate a large part of the electricity consumed on the platform and will be equipped with LED lighting. The expansion of the Masquefa logistics warehouse has the objective of responding to the expansion of the company planned for the coming years in Catalonia and the Balearic Islands. In fact, the discounter recently opened in Barcelona, ​​on Tallers street, its 75th store in Catalonia, the tenth in the Catalan capital. Catalonia is the second autonomous community with the most Aldi stores, after Andalusia, with 81, and one of the most strategic for the company. The discount retailer currently has more than 1,600 employees in Catalonia, including store employees, logistics staff and professionals from its offices located in Sant Cugat del Vallès (Barcelona). In the Balearic Islands, the chain has been increasing its presence in recent years, reaching 10 stores. See here for more: https://www.lavanguardia.com/vida/20210513/7450924/aldi-amplia-mas-13-000-metros-cuadrados-centro-logistico-masquefa.amp.html

Discount Retail Chain Aldi UK (German family owned) recently played with the world famous Nike claim "Just Do it". "Aldi’s just done it" is written in large letters on advertising banners in London. Aldi UK is very aggressively promoting the new “Aldimania” collection, there are hoodies, boxer shorts, socks and shirts. Unfortunately the collection is only available in the UK and was sold out after a few hours as customers were waiting in front of the entrance at eight o'clock in the morning to get hold of the bargains. Aldi fans like the Aldi collection and love the idea that a discounter advertises the same coolness as a sports brand. Discount stores are now a cult Discounter Aldi is known and loved all over the world. For little money you get high quality and somehow the discounter has now achieved cult status. There was already an Aldi collection in Germany last year, which was only available via a competition and was therefore artificially shortened. It worked. Competiting discounter Lidl also brought out a collection at the same time. Discounters have established themselves in pop culture over the past few years and keep attracting attention through promotions. Be it your own collection, but also grandiose marketing campaigns. In the following link we find a collection of a few campaigns with which the discounters developed their brands: https://www.business-punk.com/2021/05/aldis-just-done-it-nike-bekommt-konkurrenz/

Discount Retail Chain Aldi Ireland (German family owned) achieves an “Excellent” reputation rating in 2021 RepTrak survey. Irish grocery shoppers have voted Aldi as the most reputable supermarket in Ireland according to the new RepTrak Ireland Report, published recently. The annual RepTrak Ireland survey measures the level of trust, respect, admiration and esteem consumers have for Ireland’s largest and most visible companies. The findings announced today are from a comprehensive survey of 7,000 members of the public during January to March 2021. Aldi scored consistently well across key criteria including Workplace, Governance and Citizenship. Commenting on the achievement, Niall O’Connor, Group Managing Director, Aldi Ireland said, “Irish shoppers voting Aldi as the most reputable supermarket is testament to the dedication of our amazing store teams, suppliers and business partners, all of whom have worked tirelessly to provide the best customer experience for Aldi shoppers in incredibly challenging circumstances.” “Over the past year we have looked at areas in which we can do more for the communities we serve particularly in the areas of Citizenship and Governance. New community initiatives such as our long-term commitment to raise €1 million (US$1.2million) for Barnardos and ambitious plan to plant 1 million native woodland trees around Ireland by 2025 have made a real impact, while we have also made significant progress on our sustainability goals by reducing plastic across our range of products in its discount store.” See here for more: https://www.retailnews.ie/news-and-views/irish-shoppers-vote-aldi-as-ireland-s-most-reputable-supermarket/

Discount Retail Chain Aldi Germany (family owned) is celebrating the achievements of parents in everyday Corona in its new marketing campaign. May 9th is Mother's Day and it is actually clear which advertising will be shown on this occasion. However, Aldi simply says goodbye to the sweet odes to motherly happiness and simply honors the commitment of all parents during the Corona months. The “Elternhelden” campaign created by the German marketing & advertising agency Kolle Rebbe GmbH not only meets the current state of mind of the discounter's target group much better, but also allows Aldi Süd and Aldi Nord to develop a long-term campaign from a single celebration to make customers aware of the benefits of shopping at a discounter. See here for more:

Discount Retail Chain Aldi Nord and Süd (both family owned) has not had a good year in Germany. According to German "Lebensmittelzeitung", the discount chain had to accept the greatest loss of market share in the discounter sector in 2020. However, Aldi is now launching an attack with cheap offers and wants to regain the lost market share. All discounters are preparing for a difficult second half of the year due to the Corona crisis, as people's purchasing power threatens to fall further. In order to lure people with a small budget into their stores, Aldi will therefore again focus more on particularly inexpensive products in the future. Aldi backs down and relies on a tried and tested strategy In the recent past, the discounter had advertised with revaluations in the assortment range, which had pushed sales prices up. More and more premium own private label brands, branded items and organic products have recently been found on the shelves of the food giant. However, instead of focusing too much on the changed consumer behavior of customers, the discounter now wants to rely on the former 'back-to-basics' recipe for success of "best quality at the best price" and respond to the customers' reduced purchasing power. Soon more particularly cheap products from own private label brands Overall, the private label range is to be expanded and made even cheaper. At 90 percent, this determines by far the largest part of the discounter range. In particular, products in the so-called entry-level range, i.e. the cheapest groceries in the store, should increasingly come back onto the shelves. A private label chocolate pudding, for example, will only cost 19 euro cents (US$0.23) in the future, but this is mainly due to the comparatively small portion of 70 grams. But Aldi also wants to add more affordable items to its range in other areas. The large or family packs are an important factor here, because particularly good prices can be achieved with a lot of content. For example, a pack of Leibniz biscuits will continue to be sold at 99 cents (US$1.19), while the private label can offer extra-large packs of 2 x 220 grams for 1.19 euros (US$1.42). Aldi wants to better communicate low prices In addition, Aldi also wants to rely more on its own pricing policy in terms of communication. After the focus was more on the quality of the products recently, the discounter giant wants to lure customers into the shops again, according to "Lebensmittelzeitung", mainly through the "Original Aldi Price". With a lot of new staff, the price presentation in the market should also be improved so that customers are immediately convinced. In addition, the prices of branded products are now compared directly with those of the private label in the advertising flyers in order to focus even more clearly on the low private label prices. See here for more: https://www.watson.de/leben/aldi/958328476-discounter-neue-offensive-das-aendert-sich-jetzt-bei-aldi

The grocery industry has been significantly disrupted by the speed and scale of COVID-19. Since the onset of the pandemic, customers and retailers alike have faced the challenges of empty shelves, social distancing, face masks, rising costs, and overwhelmed supply chains. But times of crisis and uncertainty are often the best times to discover better ways to do business. Reducing a store’s product range to simplify operations and stock the products that are most in demand has been a pivotal measure in helping traditional retailers manage during the height of the crisis. As grocery retailers emerge from the unprecedented strain of COVID-19 on their businesses, offer simplification will be an essential strategy for improving both the customer experience and operational efficiencies. A TURNING POINT FOR SIMPLIFICATION Long before the COVID-19 crisis hit, grocery chains have been struggling with the climbing costs and complexity produced by unprecedented product proliferation. This trend has created larger stores stocked with 80% more SKUs on average than a typical store would have offered 30 years ago. Although customers may appreciate having more choice, they also value the ability to easily and quickly find what they want—an experience that has been lost as more products appear on shelves. Although customers may appreciate having more choice, they also value the ability to easily and quickly find what they want. Product proliferation has also become a competitive disadvantage for grocery retailers. BCG research conducted in 2020 shows that regional US grocery chains carry an average of 50% more SKUs per linear foot of shelf space than their mass and value channel competitors. And they have been losing market share to value-priced wholesale clubs and mass retailers—and even small, no-frills convenience stores, which are more expensive but provide a much faster, easier shopping experience. Simplification can create a virtuous cycle that scales end-to-end (E2E) efficiencies from the warehouse to the grocery cart. Many grocers have resisted offer simplification because they mistakenly believe that removing products from the shelf hurts sales. Our work proves this is not the case. We recently led an offer simplification trial where our client reduced 20% to 25% of SKUs across 30 categories. Sales across the impacted categories increased by 2%. But the benefits of offer simplification go much further than increasing sales. Simplification can create a virtuous cycle that scales end-to-end (E2E) efficiencies from the warehouse to the grocery cart. Handling fewer products frees up space in warehouses to store products in ways that streamline the supply chain. Relationships with suppliers improve. And customers find the products they want. THE COSTS OF VARIETY There is a fine line between just enough variety and too much duplication and complexity. On the one hand, variety is key to a successful retail grocery business. Offers that appeal to different customer tastes are important, especially in high-innovation categories such as salty snacks and frozen meals. Variety can also stimulate impulse buying. On the other hand, in most commoditized categories, such as vitamins, frozen vegetables, and canned soup, too much variety overwhelms customers. Over the years, numerous consumer psychology studies have pointed to a phenomenon known as “decision paralysis,” or “choice overload”—that is, when customers have too many choices, it feels harder to decide what to purchase and diminishes the retail experience. According to a 2020 National Retail Federation customer survey, 63% of respondents said that “convenience” is important to them—and 47% included “making it easy to find options” as part of their definition of convenience. Looking beyond the customer experience, the costs of product proliferation affect multiple facets of a traditional retailer’s operations: Stocking. Too many products on the shelf means that grocers have less space for staples that drive sales and for the unique products that increase customer loyalty. In addition, undue variety requires complex inventory processes that can increase out-of-stocks of the products customers depend on. Both crowded and empty shelves frustrate shoppers. This is a hazard for traditional retailers because it has the potential to drive their customers to competitors. Merchandising. Consumer packaged goods companies provide funding incentives (including new-item slotting fees) to make sure their products are kept on the shelf. But under these arrangements, retailers yield too much control over merchandising decisions to suppliers. Their own teams have less power to craft offers and develop Private Label branded articles that are of most value to customers. Purchasing. Too much variety and too many new products reduce grocers’ ability to consolidate their purchasing power to obtain the best costs. This puts them in a difficult spot. They can either compete with value and mass stores on price, but at the expense of margins, or they can maintain margins at the expense of customer transactions and traffic. Store Operations. The growing number of SKUs increases the time needed to restock shelves, manage backroom inventory, change price tags, and reorder products—all of which drive up labor costs. The new COVID-19 health, sanitation, and safety measures have added further cost burdens. Supply Chain. With more SKUs moving through distribution centers, supply chains are operating at near full capacity. Unpredictable demand surges related to the pandemic will continue to strain supply chains and increase the risk of product shortages. THE BENEFITS OF SIMPLICITY The current health crisis underscores the benefits of adopting a strategy of offer simplification. The benefits we have seen among grocery retailers that were pursuing offer simplification before the pandemic will become even more compelling as they adjust to the changed landscape of a post-COVID-19 world. Here grocery retailers can learn a lot from discounters. Consider the following operational improvements offer simplification can deliver: Optimized SKUs That Benefit Stores and Customers. Thoughtfully pruning SKUs allows merchandisers to balance top-selling and unique items in their offer and remove duplications that drive neither sales nor customer loyalty. Fewer products on the shelf makes shopping easier and more pleasant for customers and will reduce out-of-stocks for key products. Reduced Costs in the Supply Chain. Simplification reduces carrying costs as less cash is tied up in obsolete inventory. It also opens up warehouse space so similar products can be stored together, reducing load times for trucks delivering to stores. Longer term, capex allocations for network expansion can be deferred or saved as simplification eases capacity constraints. Increased Efficiencies in Store Operations. Fewer SKUs and less backroom inventory will reduce the hours store associates spend repricing items and restocking and replenishing shelves. This gives them more time to serve customers and, during the pandemic, to perform COVID-19-related sanitization procedures. More Productive Vendor Relationships. Because grocers associate variety with vendor funding, they often believe that they will lose these funding premiums if they take products off the shelf. As we noted earlier, after our work on offer simplification, our client saw a net increase in vendor funding. Using analytics to simplify and concentrate marketing spending on the most popular core items strengthens the partnership between retailers and their suppliers. THE RIGHT WAY TO START OFFER SIMPLIFICATION Whether you have already embarked on a SKU rationalization initiative or are rethinking how to simplify your offer in light of COVID-19, there are a number of traps that could undercut the initiative. To maximize the effectiveness, we suggest applying three perspectives when starting a simplification initiative. The Customer Many grocers frame objectives for process improvements around productivity and cost, rather than putting customer needs first. Every offer simplification needs to begin with an open conversation about the customer experience that is supported by deep analytics. All merchandisers should be making their category and planogram decisions based on a robust consumer decision tree (CDT). A CDT shows the key attributes, and combinations of attributes, that are important to customers when they are deciding what products to purchase. Customer data from a CDT, along with other loyalty and preference data, enables retailers to maintain a comprehensive offering, avoiding decisions that end up removing high-loyalty products—or eliminating new items before they can gain traction with customers. Customer loyalty data will also highlight low-volume SKUs that retailers need to keep because they’re important to specific customer groups. Customer data captured from deep analytics and loyalty metrics will form the basis for designing the offer; an offer simplification trial will validate the customer analytics and metrics. The Offer Demand-driven assortment strategies are based on learning as much as possible about customer purchasing behaviors as well as comprehensive analysis of costs of buying, distributing, and stocking different products. Retailers make fully informed decisions by assessing their current offering against a CDT analysis and loyalty data by SKU and comparing relative E2E margins. Failing to consider E2E cost implications can lead to the removal of high-margin items. In addition, grocers need to thoughtfully consider the customer experience when making merchandising decisions. If the data suggests cutting nine out of ten SKUs of a brand in a category (which will look odd on the shelf), it makes more sense to remove them all. Simplification does not mean standardization. Grocers need to work with their merchandise teams to maintain a product lineup that satisfies regional and/or local customer tastes. Every simplified offer initiative needs to be tested before it is rolled out to all stores. Thorough testing will balance statistically significant insights and practical observations, and include a regional trial. Suppliers Relying on suppliers’ data alone to make decisions shifts the focus from customers to vendors. With offer simplification, retailers can regain control of merchandising decisions, including more customer-driven placement of suppliers’ products and greater emphasis on the placement of more valuable retailer’s private label brands. Private Label brands support the customer’s intimacy and give the retailer a better and unique value for money image. With offer simplification, retailers can regain control of merchandising decisions, to get back in the assortment control tower. A POST-COVID-19 GROCERY TRANSFORMATION As the world adjusts to the new realities of living with COVID-19, offer simplification should be at the forefront of every retail grocery leader’s mind. People’s habits, including their grocery shopping routines, have changed almost overnight—and they are unlikely to revert to what they were before the virus struck. Economic burdens caused by the pandemic will only heighten customer focus on price and convenience. This will ramp up pressure on grocers already competing with discount and value retailers. At the same time, costs related to regulations around store cleanliness will continue to eat into retailers’ narrow margins. In light of these realities, offer simplification is an especially compelling opportunity to launch a cross-functional and transformational initiative. Indeed, grocers must make improvements across the value chain to compete successfully in a rapidly evolving market. Click here for more on this BCG article https://www.bcg.com/publications/2020/importance-of-offer-simplification-for-grocers

A mix of new consumers and old traditions Click on image for more:

DT-Global Business Consulting identified in Russian market outlook research a retail sales rise of 5.6% in March, the best monthly figure in 10 years, as people stock-piled. Inevitably with lock-down, the retail sector collapsed in April by a record -23.4%, the worst monthly figure in 25 years. The April fall consisted of -9.3% in food stuffs and a -36.7% in durables. By June the fall in retail sales had slowed to -7.7% (compared with June 2019). As in other countries, the “foot fall” is rising and some outlets are seeing a return of more than 75-85% of pre-crisis levels. BUT actual spending is not returning as quickly, at least for the more discretionary products. The Russian state support has been comparatively limited, it has had positive effects in stemming the fall in household and retail spending: Federal budget spending in the first half of 2020 (year on year) includes an 80% rise in non-pension social payments (aimed at unemployment benefits and childcare support), 109% increase in healthcare expenses and a 64% rise in transfers to regional budgets. Such transfers mean that the share of spending on household income (through state sector salaries, pensions and other social benefits) in the consolidated budget will rise from a high level of 56% in 2019 to 60% in 2020. The cut in spending for now seems to stem from reduced consumer loans rather than reduced money in the pocket (although that will come). The retail loan portfolio declined in April 2020 by 130bn Rubles ($1.75bn) month on month while in April 2019 last year it grew by 320bn Rubles ($4.3bn). In June, new consumer loans were still growing at a sizeable 12.6% but this was heavily down on the 19% figure last autumn and the 17.8% figure at end of Q1 2020. So not surprisingly, Russians are borrowing less (for cars, mortgages) and ‘saving for a rainy day”. And retail bank deposits (33% of citizens hold bank accounts) were stable posting annualised growth at about 10%. Travel restrictions also play a role: each year Russians spend about $50bn on foreign travel. This year we estimate this will be down by -50% and so some $25bn will stay in the country. By the way, the $25bn remaining in the country is of course good news for the rouble! By the end of 2020, retail and household spendings should be turning positive on a monthly basis. Click here for more:

Edge published an accurate report on the global outlook of the Discount Retail Channel. The discount channel is rapidly evolving to cope with changing retail dynamics in 2020, from heightened online demand associated with COVID-19, to changing in-store operations and the desire for more frictionless experiences. Here Discount Retail shows the highest global market growth together with e-commerce. Click here for more:

Without agriculture there is no food. However, their production often causes environmental damage and consequential costs that are not taken into account. Researchers have calculated the "true prices" for some products. Week after week, supermarkets and discounters in Germany lure with special offers. According to a recent study, meat, milk and cheese should actually cost much more than customers normally pay. Milk and Gouda cheese would be almost twice as expensive. In the case of minced meat, almost three times the price would have to be paid, as a team led by business IT specialist Tobias Gaugler from the University of Augsburg has calculated. The research work, however, was not published in a peer-reviewed scientific magazine, but was commissioned for a grocer. On behalf of Penny, a discounter belonging to the REWE Group, Gaugler calculated the "real costs" for a total of 16 private label branded products in the retail chain, taking into account not only the "normal" production costs, among other things, the effects of greenhouse gases and the consequences of overfertilization. Click here for more: https://www.spiegel.de/wissenschaft/mensch/lebensmittelpreise-muessten-mit-co2-emissionen-ueberduengung-hoeher-sein-a-001f44e2-521e-4b79-85d8-88ec16d4bb0a?xing_share=news#ref=rss