Apart from the pungent aroma of salted cod and the sight of exotic collections of creatures from under the sea packed in ice, or swimming in tanks, Portuguese supermarkets are very like their counterparts in other European countries. Given that every major retailer in Portugal is controlled or partly owned by continental giants such as Carrefour, Ahold, Auchan, Intermarche, Lidl or Metro, this should not come as any great surprise. "The Portuguese consumer is no different to consumers across Europe, in that he is becoming more demanding and more interested in convenience ­ in food to go," says Jorge Marques dos Santos, president of APED, the Portuguese retailers' association representing "everyone dealing in fast moving consumer goods except wholesalers and independents". Like many Europeans, the Portuguese are also calling for safer, more natural food and, like the British public, according to Marques dos Santos, "they say they want to eat organic, but it's a different matter when you ask them to pay for it". While planning laws have put a stop to hypermarket expansion, supermarket operators such as Pingo Doce (owned jointly by Jeronimo Martins and Ahold), Intermarche and hard discounters such as Lidl are expanding like wildfire. Marques dos Santos is conducting a vigorous campaign against the government's "unfair, artificial restrictions" on the market which make building a hypermarket "virtually impossible" and force outlets over 2,000sq m to close on Sunday afternoons. He dismisses claims that the laws protect independent retailers. According to APED, the number of traditional grocers fell from 27,894 to 23,061 between 1995 and 1999. While small retailers represent a large percentage of all outlets, their market share dwindled to 12.7% in 1999 from 18.4% in 1995 as they proved ill-equipped to compete with the tide of foreign market entrants, says APED. "While it might look like independents have decreased drastically," emphasises Marques dos Santos, "Portugal is still the European country with the highest number of stores per 1,000 inhabitants, at 2.8 compared to Spain's 1.7 and the UK's 0.6." The fact that new online home shopping channels, developed by Modelo Continente, Jeronimo Martins and the co-operative group Maxi Grula, allow 24-hour shopping makes a nonsense of the time restrictions on physical stores, he adds. But top of APED's agenda now is to ensure that Portuguese retailers are prepared for the arrival of the euro in January. Angry that they must act as a free bureau de change on January 1 while the banks are shut, APED is demanding the banks set up temporary exchange facilities. And the question of who should foot the insurance bill is in dispute: retailers will have to handle up to 20 times the usual amount of cash early in 2002, because they can accept escudos and euros, but must give change only in the new currency. Marques dos Santos is less forthcoming about the current preoccupation of retail analysts, namely what Carrefour will do with its 22.4% stake in Portuguese retailer Modelo Continente, which it inherited from Promodes. Carrefour has five hypermarkets in Portugal under its own fascia, plus the Champion supermarkets and Dia and Minipreco discount chains, so it is now both a stakeholder in Modelo Continente and a direct competitor. Whether Carrefour plans to stage a bid for the rest of Modelo Continente or sell its stake back to MC's parent company Sonae is unclear, but APED director Jose Rousseau says both parties agree the situation can't continue. Modelo Continente's brief flirtation with BP for the Modelo Express convenience stores ended in tears and it has since teamed up with petrol company Galp to launch a convenience format under the M24 fascia. Meanwhile, Jeronimo Martins has not exercised its option to buy Ahold's 49% stake in their joint venture, instead hiving off its manufacturing interests. So what of the future? It is likely foreign retailers will continue to eat into the market share of independents, although Marques dos Santos is convinced they will not vanish completely. "There will always be a market for specialist stores in convenient locations." {{FEAT. GENERAL }}