Several grocery retailers have been announcing greater focus on convenience stores. They are also called city stores, local or proximity stores and concern neighbourhood formats developed by different retailers, from large supermarket chains to cooperatives and also discounters. Convenience stores are a hit in the city center, but also in the countryside awakened by the arrival of urban dwellers.
Aldi, for example, wants to increase the number of Aldi Local stores in the UK, especially in London, and is on the look for sites of as little as 460 m2. In Belgium, the retailer has also launched its first ‘compact’ store in Brussels. According to Aldi, the range is almost the same as in its larger stores, it just had to make the store’s aisles smaller to fit in the space. Prices remain the same.
A study by Aecoc in Spain shows a rise in formats focused on convenience in the country. Retailer Dia has set itself the goal of becoming the leader in neighbourhood stores. It has worked on remodeling its stores so that complete shopping can be done close to customers’ homes in a practical way and with a wide assortment, giving a relevant role to fresh produce.
Asda plans to open 300 convenience shops in the UK in the next four years. It wants to catch up on the format to help drive growth. It expects to create 10,000 jobs with the openings. Waitrose wants to build out its network of Little Waitrose stores, the retailer finds it doesn’t have enough presence in the convenience channel. In the meantime, Sainsbury’s is expanding its Sainsbury’s Local format, which now comprises over 800 stores. Sales in its convenience shops grew 10% last year to £3bn. Tesco has its Express format and currently has a network of 2,000 stores.
In Belgium, data platform Locatus, which specializes in retail real estate has shown that the neighbourhood format is increasing for all leading retailers. Carrefour Express saw an increase in stores and so did Proxy Delhaize and Okay, Colruyt’s neighbourhood banner.
Remarkably, French retail leader E. Leclerc, of which the majority of stores are hypermarkets, is now also testing the smallest supermarket format. It launched Leclerc Relais local supermarkets of around 250 m2 and promises “proximity finally at Leclerc prices.” With the new concept, it wants to get a foothold in the convenience store market where its competitors, such as Carrefour (Carrefour City), Auchan (A2 pas) and Cora (Cora en ville) or Casino (Franprix, Spar, Vival) have already been developing their network.
Delhaize wants to convert all of its 128 supermarkets into franchise stores. Until now, the retailer had 636 affiliated stores operated in franchise and 128 stores under own management. The intended privatization aims to bring all stores into one model and adapt more flexibly to the rapidly evolving market and, thus, stimulate growth.
Although Delhaize says that all employees in the supermarkets will keep their jobs as well as the working conditions, only jobs at the head office would disappear, the news came as a bombshell. The unions were not amused that they had not been informed. Many Delhaize stores have since been closed due to strikes, in addition, there was a blockade in its main DC. This has negative consequences for the supermarket chain’s suppliers as well as for the food, especially fresh food, that has been lost.
In the meantime, more than 200 candidates have come forward to take over the branches and Delhaize will begin the selection process soon.
The UK and the EU have finally adopted the post-Brexit deal for Northern Ireland. Signing of the agreement took place after years of tension about the practical challenges of the implementation of the previous NI protocol.
The new deal is to reduce frictions on UK to NI trade flow and comes to a relief for the food industry. It practically divides goods to go across borders either in a green lane or a red lane. British goods, that are intended to stay in Northern Ireland will use the green lane with less paperwork and hardly any routine physical checks along the Irish Sea border. Goods that are going on to the Republic of Ireland or on to other EU countries will use the red lane, and will have to provide detailed customs information as well as undergo checks and controls.
Businesses will have to register as a trusted trader under a new UK Internal Market Scheme (UKIMS) to use the green lane. A wide range of retailers including supermarkets and suppliers will qualify for UKIMS. Once qualified, retailers and suppliers would be able to use the green lane and enter NI when the goods are intended to stay there. Physical checks on green lane loads will not be carried out routinely, which should reduce the time hauliers spend at the border and increase the flow of goods into NI.
Retailers will have to introduce new ‘not for EU’ labels on certain food products sold north of the border. The labelling requirement will be rolled out in phases, giving business time to adjust. Products such as meat, dairy and composite products are considered high risk and will have to be labelled starting October.
The details around the necessary paperwork, how the checks will take place and how exactly they will affect supply chains are still to be determined.
Ultra-processed foods (UPF) are increasingly being criticized, they would promote obesity and chronic diseases. The NOVA classification system, adopted by the World Health Organization, is currently being discussed in the EU and in individual countries. UPFs fall in class 4 of the NOVA system and are described as containing five or more ingredients including substances extracted from foods and substances derived from further processing of food components. They may also contain food additives including colors, flavors, non-sugar sweeteners and processing aids found only in UPF.
While most modern foods are processed in some way (e.g., raw rice packaged into dried rice, pasteurized milk), UPFs are recognizable for no longer serving the purpose of solely preserving food but rather to make ready-to-eat, convenient products with long shelf-lives and which are liable to replace other foods.
To prevent warning labels or advertising restrictions, the industry is defending itself. FoodDrinkEurope, the EU food industry federation, and the German Food Association have launched position papers. The papers state that processing food is done to preserve food, to guarantee food safety and optimize taste. Additives are already extensively tested by the Efsa before they are allowed.
Also, science criticizes that food in NOVA class 4 would be unhealthy. Nutritionists say that there are products such as pizza, cookies or other baked goods which could be culinary preparations or regarded as ultra-processed. It is not known whether the ultra-processed version necessarily has lower nutritional quality than its home-cooked counterpart. In fact, in some cases, the home recipe could be worse than its ultra-processed alternative.
