It takes a certain type of retailer to thrive in a downturn and that's what makes IGD's 10 to watch in 2009 list so interesting. Nick Hughes reports
What do the world's largest fast-food restaurant, a premium Indian supermarket and a French deli share in common? They all feature in IGD's list of 10 to Watch in 2009 - a list that includes just one home-grown operator and a number of innovative new formats from big national and international players that could teach even the most successful retailers here a thing or two.
It's no surprise given the current economic climate that the list features chains with a strong price focus, but that's not all they offer, says Jonathan Gunz, analyst at IGD and the report's author. "Quite a lot of these retailers are delivering on price but many are really taking things further," he says.
"You have to look at the way the Co-op is communicating on a subject that is not just price and value," says Gunz. "People are interested in price, yes, but they also have values and ethics they stick to and will continue to stick to."
Ethics is not the only area in which the retailers on the list are excelling. Chez Jean is a new store being trialled in France by Casino and Relay that Gunz describes as "the ultimate convenience concept" with one half devoted to food-to-go and the other half to a more conventional convenience offer. Stores also boast cash machines, wi-fi access and newspaper recycling and battery charging facilities.
Meanwhile, taking a leaf out of Kaiser's Tengelmann's book as Tesco is also doing in Newcastle, fellow German chain Edeka is trialling a new format for over-50s with wider aisles for customers in wheelchairs, maps of stores, easy-to-push trolleys and special grabbing tools to help customers lift goods from shelves.
It also has plans for 1,000 new stores in Germany by the end of 2010, but its local entrepreneur ownership model means shoppers feel they are still supporting a local business.
In the US, meanwhile, Pro's Ranch Markets - a family-owned business in Arizona, California, New Mexico and Texas - has set out its stall to provide a one-stop shop for the Mexican population. "Effectively, the business is targeted at the Hispanic shopper, which is a growing part of the population," says Gunz. "It stocks a wide range of Mexican baked goods, every store has a tortilla station and there's a huge amount of animation and theatre in stores."
Gunz says UK retailers can learn a great deal from locally adapted models such as Pro's. "There's room for improvement in the UK. Customers do like local and regional food, but beyond that it's about understanding what their specific requirements and desires are."
A case in point is the significant Muslim population, which is still arguably under-served by the mainstream players when it comes to halal food. "I don't think we do enough to target the ethnicity of the communities we are trading in," agrees Peter Marks, CEO of The Co-op Group. "For us it's a work in progress." If one of IGD's 10 to watch concedes it has more work to do, then those not on the list certainly have their work cut out.n
What do the world's largest fast-food restaurant, a premium Indian supermarket and a French deli share in common? They all feature in IGD's list of 10 to Watch in 2009 - a list that includes just one home-grown operator and a number of innovative new formats from big national and international players that could teach even the most successful retailers here a thing or two.
It's no surprise given the current economic climate that the list features chains with a strong price focus, but that's not all they offer, says Jonathan Gunz, analyst at IGD and the report's author. "Quite a lot of these retailers are delivering on price but many are really taking things further," he says.
IGD: the 10 to watch
The Co-op Group (UK) - the world's largest consumer co-op. Responsible local retailing is key to its offer
Aldi Süd (home market: Germany) - the more progressive arm of the global discount retailer with a highly efficient business model
Chez Jean (France) - new French convenience chain from Casino and Relay. Strong in food to go with innovative branding and marketing
Dia (Spain) - Carrefour's discount arm with a focus on convenience and fresh. It is embarking on a store expansion/conversion programme
Edeka (Germany) - the country's largest retailer and national-focused co-op is focusing on leveraging buying power and multi-formats
Gourmetcity (India) - Hypercity's relatively new premium business has a fashionable world food focus
Marketside (US) - Wal-Mart's new neighbourhood format. Chosen for its low prices, freshness and convenience, and layout and design
McDonald's (US) - now working on sourcing, ethics and sustainability
Pro's Ranch Markets (US) - niche family-owned chain targeting local Mexican population
Simply Market (France) - Auchan's discount-supermarket hybrid with a strong own-label focus
As the recession started to bite, many predicted consumers would ditch ethics and switch to cheap and cheerful food - benefiting the discounters. These retailers are indeed thriving, but so, it seems, is The Co-operative Group, the sole UK-based player on the list and one that very much pushes a value of values as well as a value-for-money message. The success of the UK's fifth-largest supermarket following the completion of its £1.57bn Somerfield deal is as much to do with the way it interacts with its consumers as its offer, says Gunz. The Co-op Group (UK) - the world's largest consumer co-op. Responsible local retailing is key to its offer
Aldi Süd (home market: Germany) - the more progressive arm of the global discount retailer with a highly efficient business model
Chez Jean (France) - new French convenience chain from Casino and Relay. Strong in food to go with innovative branding and marketing
Dia (Spain) - Carrefour's discount arm with a focus on convenience and fresh. It is embarking on a store expansion/conversion programme
Edeka (Germany) - the country's largest retailer and national-focused co-op is focusing on leveraging buying power and multi-formats
Gourmetcity (India) - Hypercity's relatively new premium business has a fashionable world food focus
Marketside (US) - Wal-Mart's new neighbourhood format. Chosen for its low prices, freshness and convenience, and layout and design
McDonald's (US) - now working on sourcing, ethics and sustainability
Pro's Ranch Markets (US) - niche family-owned chain targeting local Mexican population
Simply Market (France) - Auchan's discount-supermarket hybrid with a strong own-label focus
"You have to look at the way the Co-op is communicating on a subject that is not just price and value," says Gunz. "People are interested in price, yes, but they also have values and ethics they stick to and will continue to stick to."
Ethics is not the only area in which the retailers on the list are excelling. Chez Jean is a new store being trialled in France by Casino and Relay that Gunz describes as "the ultimate convenience concept" with one half devoted to food-to-go and the other half to a more conventional convenience offer. Stores also boast cash machines, wi-fi access and newspaper recycling and battery charging facilities.
Meanwhile, taking a leaf out of Kaiser's Tengelmann's book as Tesco is also doing in Newcastle, fellow German chain Edeka is trialling a new format for over-50s with wider aisles for customers in wheelchairs, maps of stores, easy-to-push trolleys and special grabbing tools to help customers lift goods from shelves.
It also has plans for 1,000 new stores in Germany by the end of 2010, but its local entrepreneur ownership model means shoppers feel they are still supporting a local business.
In the US, meanwhile, Pro's Ranch Markets - a family-owned business in Arizona, California, New Mexico and Texas - has set out its stall to provide a one-stop shop for the Mexican population. "Effectively, the business is targeted at the Hispanic shopper, which is a growing part of the population," says Gunz. "It stocks a wide range of Mexican baked goods, every store has a tortilla station and there's a huge amount of animation and theatre in stores."
Gunz says UK retailers can learn a great deal from locally adapted models such as Pro's. "There's room for improvement in the UK. Customers do like local and regional food, but beyond that it's about understanding what their specific requirements and desires are."
A case in point is the significant Muslim population, which is still arguably under-served by the mainstream players when it comes to halal food. "I don't think we do enough to target the ethnicity of the communities we are trading in," agrees Peter Marks, CEO of The Co-op Group. "For us it's a work in progress." If one of IGD's 10 to watch concedes it has more work to do, then those not on the list certainly have their work cut out.n
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