The food retail market - France (2024)

1.2 A global market dominated by major US retailers

In ****, global sales in the food retail market, including groceries, are estimated at **,***.* billion dollars. This market is expected to grow steadily, with a compound annual growth rate of *% from **** to ****.[***]

Ranking of the largest supermarket groups by sales figures World, ****, in billions of euros Source: ****

In terms of sales, the global food retail market is dominated by american companies (***), which includes Lidl, ranks *th worldwide.

1.3 A national oligopolistic market

The food retail market is worth around *** billion euros in France. Some **,*** French communes have a food store.

The French market is oligopolistic marketa few major groups share the bulk of the market:

Market shares of food retailers France, **** (***), in % and points Source: ****

E.Leclerc remains the market leader, with market share up *.* points. This is an oligopolistic market, with the top * groups (***) than integrated integrated stores.

Growth in hypermarket and supermarket sales France, ****-****, Billions, € Source: ****

This graph shows sales trends for hypermarkets and supermarkets in France from **** to ****. Since ****, sales have increased by more than * billion euros. This chart does not include sales from convenience stores and drives, which may explain the difference in results with the overall market sales figure mentioned above (***).

2.1 French household food consumption habits

Food retailing is a market that responds to a primary need primary need need: food. We can therefore say that all individuals are customers in this market, and that demand is strong. However, consumer habits vary and evolve according to customers and economic conditions.

Frequency with which the French visit supermarkets France, ****, % of total source : opinionWay

Frequency with which the French visit hypermarkets France, ****, % of total source: opinionWay

Whether in supermarkets or hypermarkets, consumers mainly go to the supermarket once a week on an errand.

Average monthly food budget France, ****-****, € The average monthly food budget has remained fairly stable stability over the years, with little variation. However, there was a marked decrease in ****, followed by an increase in ****, which will continue until ****.

Preferred locations for food shopping in France France, ****, % of total Source : OpinionWay Half of the French population shops in hypermarkets and general supermarkets to do their shopping, while a significant proportion (***)

Response to the question "in the future, if you had to keep just one type of food store, would it be...?" France, ****, % Source : opinionway This graph once again highlights the key role played by hypermarkets and supermarkets in the purchasing habits of French consumers. When asked to ...

2.2 The effects of inflation on French consumer behavior

Inflation rate trend France, ****-****, %, %, %, %, %, %, %, %, %, %, %, %, % Source: ****

Inflation will rise sharply in ****, to *.*%. **** was also a year of high inflation, despite a slight decrease compared to ****. This inflation has had a major impact on food prices in supermarkets.

Impact of inflation on French consumer behavior France, ****, %, %, % Source: ****

With the rise in food prices, consumption habits have changed for all French people, even the most affluent. The main consequences of inflation are a move downmarket in food purchases and a consumption of certain food products.

Inflation has been falling for several weeks now, and should continue to do so over the coming months. Despite this good news, the French are planning to cut their spending even further in ****, with some expenditure items more affected than others. Food is in the front line, with **% of French people wishing to reduce this expenditure item. (***)

2.3 Private label consumption up, national brands down

Sales volume growth in FLS CPG France, ****-****, % Source: ****

Price rises seem to have had a positive impact on private labels, which are enjoying volume performance year-on-year. National brands only posted negative trends. Over P** ****, in July ****, the gap between private labels and national brands is greater than over all previous periods.

2.4 Declining demand for organic products

As explained above, inflation has had an impact on French consumer habits, with a decline in the consumption of certain products and a move downmarket in the range of products purchased. These changes in consumption have had an impact on sales of organic products.

According to the barometer of organic products in France in ****, drawn up by Agence bio, **% of French people said they had eaten organic food at least once a month over the past ** months. This is **% less than in ****. The proportion of people who have not consumed organic food products in the year has almost doubled since doubled since ****, now reaching **% in ****. [***]

Sales of organic products in supermarkets France, ****-****, in billions of euros Source: ****

Sales of organic products grew strongly between **** and ****, increasing by *.** billion euros in * years. Then, from **** onwards, sales declined, continuing to fall in ****.

Evolution of total FMCG FLS sales by volume France, ****-****, in % Source : LSA With inflation, it was interesting to look at sales trends in volume and not just in value, to avoid an analysis biased by price increases over **** and ****. Sales volumes are down sharply over all periods compared with the same period the previous year. The trend is even ...

3.1 Value chain

In the value chain,

The producer supplies raw materials after negotiating purchasing conditions with the wholesaler or central purchasing agency, while complying with strict standards defined in specifications. The wholesaler, where applicable, takes delivery of the producer's goods, negotiates with the chain's buying groups, and delivers to the warehouses. The buying group negotiates purchasing conditions with the producer or wholesaler, and acquires goods for the stores. The warehouses receive, store and prepare orders, supplying the stores. Stores, in turn, manage stocks, receive orders and make goods available to consumers.

It is also possible for producers/manufacturers to sell directly to consumers, in what are known as "short circuits".

Source: ****

3.2 Number of companies and number of employees

Number of supermarket food stores :

Number of food stores by format France, ****, by value Source: ****

As the graph shows, the majority of our stores are convenience stores stores in France. What's more, the hypermarket format is the least represented in France.

However, the hypermarket is much larger in terms of sales area, ranging from *,*** to **,*** m*, whereas the sales area of a convenience store varies from *** to *** m*. It is therefore less difficult to set up more convenience stores than hypermarkets.

Number of employees in food retailing :

Number of employees in food retailing France, ****-****, in thousands Source: ****

Since ****, the number of employees in the food retail sector has grown significantly, from ***,*** in **** to ***,*** in ****. However, there will be a slight decrease decrease between **** and ****which may be explained by the deployment of vending machines in food outlets, resulting in a drop in the number of employees.

It should be noted that the majority of employees are hired on permanent contracts (***)

3.3 Acquisitions that are changing the landscape of French retailing

Over the past few months, the structure of the food retail market has undergone major changes, with the takeover of certain stores by different banners: Intermarché and Auchan are set to acquire former Casino stores, while Carrefour is set to acquire the Cora and Match banners in France.

Acquisition of Casino stores by Intermarché and Auchan:

By October ****, some ** Casino outlets had already been sold to Intermarché, mainly hypermarkets and supermarkets.

In December ****, the Casino group's current CEO, Jean-Charles Naouri, announced that only the auchan-Intermarché tandem in the negotiations to buy the *** hypermarkets and supermarketsthese will represent sales of *.* billion euros by ****.

Lidl and Carrefour are also said to have made bids, but not jointly. It would appear that the Auchan/Intermarché duo was the preferred option, given the greater number of jobs it would safeguard. The division of the *** stores between Auchan and Intermarché is not yet official, but it seems that Auchan will get the hypermarkets and Intermarché the supermarkets.

If the offer is ratified, this would mean the loss of almost *** Casino stores under the Netto or Intermarché banners. *** Casino stores had already been acquired in the first two waves of store sales.

Source: ****

Acquisition of Cora and ...

4.1 Offer typology

Customers can choose from a wide range of products, which can be classified under different brands and product ranges.

Different brand forms :

Different product ranges:

We can also classify assortment products under different product ranges:

Classic products Premium products Organic and plant-based products Local, original products

4.2 Rationalization of assortment

Impacted by inflation and changing consumer habits, retailers are taking strategic strategic decisions in the management of their departments. They opt for reducing the number of references in their stores. The aim is to boost economic efficiency, while meeting the expectations of consumers who are now ready to sacrifice diversity for price.

Change in the number of SKUs in food superstores, by channel France, ****-****, % Source: ****

The number of SKUs is falling in all distribution channels

Change in the number of FLS FMCG SKUs in supermarkets VS N-* France, ****-****, % Source: LSA Source: ****

Change in number of FMCG FSL references in hypermarkets VS N-* France, ****-****, % of total Source: ****

Whether in supermarkets or hypermarkets, first-price first-price products are the only ones to see a positive trend in the number in the number of items in the store assortment. The increase in the number of first-price products available on the shelves is a response to the decline in French purchasing power, which is strongly linked to inflation.

4.3 Significant digitalization of our offering

The mass retail sector is undergoing massive digitalization, which began a decade ago but was accelerated by the Covid crisis and various confinements. E-commerce, drive and delivery services, click and collect illustrate the significant digitalization of the retail sector.

The Covid-** crisis highlighted the need to develop omnichannel omnichannel strategies to meet the new challenges posed by changing consumption patterns.

It's worth noting that the drive channel is experiencing a positive trend in sales. What's more, the number of drive sites where customers pick up their shopping continues to rise.

Growth in drive sales France, ****-****, in billions of euros Source: ****

Growth in number of drive sites France, ****-****, by value Source: ****

In ****, there will be *,*** drive-in outlets, including *** pedestrian outlets,

5.1 Law of November 17, 2023 to regulate commercial negotiations

Every year, commercial negotiations take place between manufacturers and distributors. The aim of these negotiations is to dhe aim of these negotiations is to set new selling prices for mass-market products. Usually, commercial negotiations take place betweenecember * and March *. For the **** negotiations, supermarket professionals are faced with a change in dates, as a result of the law promulgated on November **, ****.

This law concerns"any distributor operating a predominantly food retailing business and any supplier of FMCG products" and sets a different timetable from previous years, with deadlines brought forward to January. The aim of this law is to combat inflation and thus bring prices down more quickly. In addition, the sanctions applicable to supermarket professionals in the event of non-compliance with these deadlines have been reinforced.

The new deadlines svary according to the supplier's sales turnoverhere is a table summarizing the new dates:

Source: ****

5.2 Anti-waste law for a circular economy (Loi AGEC)

The mass retail sector is impacted by the AGEC law in several ways: lfood waste with unsold goods and the use of plastic with the reduction of single-use plastic packaging.

Management of unsold goods :

The mass retail sector is responsible for almost **% of food waste in France. ** million tonnes of edible foodstuffs are wasted every year in the country, equivalent to around *** Kg per person per year. (***)

Unsold food and non-food items must not be thrown away or disposed of at the risk of a heavy fine for the retailer. There are several ways to recycle unsold products:

Distributors donate their unsold products to charitable associations, which redistribute them to people in difficulty. Installation of short-dated bins Sale of anti-gaspi baskets via specialized applications

Reducing plastic use

The AGEC law sets * targets for the use of plastic in supermarkets:

Achieve a reduction of **% dsingle-use plastic by **** Work towards complete elimination, i.e ***%, of single-use plastic packaging by the end of **** Achieve full recycling of ***%of single-use plastic packaging by January *, ****.

5.3 Loi Descrozaille

The Descrozaille law (***).

As soon as it comes into force, promotions for non-food products may not exceed exceed **%. Initially presented as a measure to protect manufacturers in their negotiations with supermarkets, this law has not met with unanimous approval french people rely heavily on promotions to reduce their spending.

Although our study focuses on food retailing, it should be noted that this new law, which affects non-food products, could also have an impact on the food sector. Indeed, with fewer promotions on non-food products, household spending on food products could fall.

Source: ****

6.1 Player segmentation

The different types of sales channel in food retailing:

For example, Intermarché, a group of independent retailers, includes supermarkets, hypermarkets and convenience stores. Here's a table summarizing the different types of sales outlets:

It's important to note that SDMPs (***) are not included in this classification. In concrete terms, we're not talking about SDMP hypermarkets or SDMP supermarkets, but simply SDMPs.

Distribution of supermarket sales by channel France, ****-****, % of sales Source: ****

Hypermarkets and supermarkets together account for more than**%of supermarket sales. Unsurprisingly, hypermarkets account for the lion's share of sales, which can be explained by the very comprehensive range offered by this type of distribution channel. Supermarkets also account for a significant proportion of sales, with**%of sales.

• E.Leclerc
• Les Mousquetaires Groupement
• Système U
• Carrefour France
• Lidl France
• Aldi France
• Auchan Retail
• Casino France
• Coop Atlantique
• CodiFrance Belle France
• Cap 3000 Aldeta (groupe Altarea cogedim)
• Centre Bourse (Klépierre)
• Grand sud (Klépierre)
• Centre Paul Doumer (Terranae)
• Sopic Palais des Pyrénées
• Cora Hypermarchés