Maybe you could put it down to the 'Nutella effect', but French supermarket group Intermarché was the strongest performer in the latest set of Kantar Worldpanel results for the French market, covering the four week period to 18 February.
Intermarché posted a 60 basis point (bps) increase year-on-year to sit on 13.9% market share, according to the data, with Kantar Worldpanel noting that the retailer 'enjoys a rising level of loyalty' among consumers.
Last month, the retailer hit the headlines following a price promotion that saw jars of Nutella slashed from €4.50 down to €1.41, a 70% discount, leading to ugly scenes at its stores as consumers scrambled for the cut-price product.
While the promotion was criticised by both Nutella parent Ferrero and the French government, the publicity associated with it appears to have provided a boost to Intermarché, with the retailer outperforming its competitors in terms of sales growth.
Following the promotion, Ferrero issued a statement saying that it ‘deplores’ this type of promotional strategy, adding that its consequences ‘create confusion and disappointment in the minds of consumers’.
On the subject of promotions, Kantar Worldpanel said that the average promotional weight on purchases in the French market last year was 14.6%, accounting for €11.8 billion of the €81 billion spent in the market last year.
Market Performance
For the four-week period to 18 February, market leader E. Leclerc saw its market share decline by 10 bps in the period, year-on-year, to sit on 20.9% market share for the four-week period.
However, second-placed Carrefour was unable to gain on its rival, posting a 30 basis point decline year-on-year to sit on 20.3% market share, with its hypermarkets division seeing a 30 bps drop (to sit on 10.2% market share) and its supermarket operation falling by 20 bps (to 7.4% share).
The biggest year-on-year decline was seen at Auchan, which posted a 40 basis point drop to hold 10.2% of the market.
Elsewhere, Groupe Casino saw a 10 basis point decline to hold 11.7% share, Système U rose 10 basis points to sit on 10.3% share. Lidl saw a 20 basis point gain to hold 5.4% share, Delhaize was flat on 3.5% share, and Aldi was up 10 basis points to 2.4% share.
The overall market was up 2.1%, after a 2.1% decline in the four week period to 21 January, and a 4.2% increase in the four week period to 24 December.
Analyst Comment
Commenting on the performance of the main players in the French market, Bruno Monteyne of Bernstein Research said that the four weeks to 18 February, "saw a rebound in the French FMCG market with +2.1% growth YoY, which is a 420bps improvement versus a weak January. The improvement can be attributed to calendar effects, in which trading days were pushed into the December period (hence the strong December trading). Averaging the last two periods to neutralise these effects, February trading was in line with the last two months."
Monteyne noted that Carrefour's performance has seen "some improvement" in the convenience channel, however its supermarkets and hypermarkets continue to lose share.
"The new CEO has a credible plan to fix these problems but execution on the plan will take time and we would need to see volume and traffic stability, execution on cost cutting and cash generation to get more positive on Carrefour," he said. "Next period Carrefour's comps get materially easier therefore results are very likely to improve, which may provide a short term trading opportunity."
© 2018 European Supermarket Magazine – your source for the latest retail news. Article by Stephen Wynne-Jones. Click subscribe to sign up to ESM: The European Supermarket Magazine.
