New Carrefour Contact convenience format
Convenience stores in France are outperforming the total grocery market and are spearheading format development, according to a new report from Verdict Research.
In its study, European Grocery Retailers 2009, Verdict predicts a tough year ahead as falling oil and raw material prices in combination with the discounter threat will lead to a significant easing in grocery prices in Europe in 2009.
It expects grocery retailing to be adversely affected by the downturn in six key areas: mergers and acquisitions, format diversification, international expansion, sale and leaseback deals, non-food ranges and sales of organic products.
Despite the doom and gloom, convenience is in a good position, according to report co-author Simon Chinn.
“In the current economic climate, convenience is doing surprisingly well,” he said.
Chinn highlighted France, in particular, as a market where convenience retailers are growing ahead of the overall market.
There, Carrefour is trialing development of two new convenience store formats: Carrefour Contact and Carrefour City.
New Carrefour City format offers extended opening hours
Carrefour has opened four Carrefour Contact stores and two Carrefour City outlets. A third Carrefour City opens tomorrow (4 February) in Avignon and a further store in Paris is scheduled for the spring.
Carrefour Contact: everyday needs and fresh foods
Carrefour Contact and Carrefour City are being developed as a part of the retailer’s wider strategy for a multi-format single brand.
Chinn said the convenience pilots follow the successful rebranding of older supermarkets in the Carrefour estate to the Carrefour Market banner. Carrefour had converted 160 stores to this format by the end of 2008.
“The real focus is on having the Carrefour brand running across the whole portfolio of stores,” he said.
Convenience is the star-performing format in the Carrefour business. In the fourth quarter of 2008, like-for-like sales in convenience increased by 2.1% compared with the same period in 2007, while its hypermarket format declined by 3.3% and hard discount format fell by 3.9%.
A relaxation in the planning laws in France is also poised to benefit smaller stores and discount retailers, said Chinn.
“Despite the tough climate, convenience retail will become a real battleground in France, especially with the ability to open new stores. There is a lot of demand for convenience due to ease of shopping and proximity,” he said.
Casino Franprix: expanding format
Casino’s convenience format Franprix is also bucking the retail trends with like-for-like sales up by 4.3% in the last quarter of 2008. Same store sales at Casino’s other formats were in negative growth in the same period.
Casino credited the gains at Franprix equally to an increase in footfall and higher average basket spends.
The retailer is accelerating the expansion of Franprix. It opened 24 stores in the final quarter taking the chain to over 700 stores.
According to Chinn, Casino has a target for 1,000 Franprix stores by 2010 and is expanding the chain outside of its Parisian heartland to other French cities.
The Franprix offer is based on providing good quality products at low cost with a focus on fresh foods and a strong Fairtrade range. Around 80-90% of the offer is private label.