Discounts challenging big hyper markets

The discount channel has been expanding successfully in France as well, while the market share of bigger than 6,500 square meter hyper markets has been shrinking. Five out of the 11 leading European food retailers are French. Carrefour is no. 1 in Europe, while Auchan is sixth with E. Leclerc, Intermarché and Casino Guichard-Perrachon in 9th, 10th and 11th places. France is one of the principal markets with 64.5 million consumers. We have been informed about trends in the French market by Becquart Loic from the local Nielsen subsidiary. In the 380 food categories monitored by Nielsen, the combined market share of hyper markets, supermarkets and discounts rose by 4 percent in the December 2007-November 2008 period, with sales exceeding EUR 70 billion. Sales in terms of quantity were down by 2 percent. The leading position of bigger than 6,500 square meter hyper markets (24.2 percent) was challenged, but smaller than 6,500 hyper markets retained their position. Discounts boosted their sales by 9 percent. Sales exceeded EUR 1 billion last year in 13 categories. Yoghurt was the biggest category in this group of stores, with annual sales of EUR 1.8 billion. UHT milk produced 12 percent growth in terms of value. Sales of the third category, whisky and bourbon expanded both in terms of value and quantity, with the same true for carbonated soft drinks in fourth place. Among household chemical products and cosmetics, 160 categories are monitored by Nielsen in France. Total combined sales stagnates at EUR 14.4 billion last year. Hyper markets still dominated these categories (accounting for over 50 percent of sales), but their market share was declining. Discounts also boosted their market share in these categories by 1 percent. Washing powder is the only category with sales exceeding EUR 1 billion, though sales were down by 6 percent in terms of value last year.