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Strategy Briefing

Emerging Markets: Overview and Growth in Opportunities in Grocery Channels

43 pages, Sep 2014

US$1,325

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About This Report

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Demographic evolution in emerging markets is strongly influencing the face of grocery retail in the region, from the move towards more modern formats to the increased presence of international retailers seeking growth opportunities to offset their home market’s maturity. This briefing analyses emerging regional markets in terms of retail environment, demographic changes and the strategies employed by leading grocery players, highlighting the most attractive markets and grocery channels for expan

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Overview

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Gain competitive intelligence about market leaders. Track key industry trends, opportunities and threats. Inform your marketing, brand, strategy and market development, sales and supply functions.

Half of all retailing sales will come from emerging markets by 2018

In EMEs, the retail landscape varies from market to market, but overall retail sales in are gaining share from developed markets and are expected to represent 53% of global grocery retailing in 2018, boosted by strong growth in China, in particular.

Purchasing habits are evolving as young and urban consumers move away from traditional channels

Demographic changes in EMEs are shaping purchasing habits. Grocery retailers have adapted their offer to cater to increasing demand for convenience formats in city centres from a younger and increasingly urban population.

Modern grocery channels are gaining share but traditional formats still dominate in emerging markets

Whilst modern grocery channels see strong growth, most consumers continue to shop in small independent local stores and markets. This is due to fewer women being involved in the workforce than in developed countries, as well as poor urban planning and low car ownership in some markets, restricting supermarket/hypermarket growth.

Moves towards both smaller and larger grocery formats

As a result of rising car ownership and urbanisation, among other factors, the penetration of hypermarkets on one hand and convenience stores on the other hand is growing, at the expense of supermarkets, although these remain the most common modern grocery format.

International retailing players lead expansion of the grocery channel in emerging markets

Players from developed markets are entering EMEs through franchise partnerships with local operators, as well as acquisition of local players. This is partly a response to legislation on FDI, but also allows retailers to boost their global store expansion while offering their expertise, participating in the modernisation of local retail infrastructure.

Smaller formats to complement large formats offer

Urbanisation and higher disposable income in EMEs have created the need for more convenience. As a result, convenience stores are increasingly replacing traditional independent small grocers in these markets.

In order to sustain future growth, grocery retailers could expand through both small and large formats. In Latin America for example WalMart has few convenience stores, but this expected to be the best performing grocery channel over the 2013-2018 period.

Growing opportunities in second-tiers cities

The large and expanding middle class in EMEs is contributing towards a gradual transformation in consumption patterns, reaching second-tier cities, where average disposable incomes are approaching the same levels as in larger cities.

This represents an opportunity for retailers to expand their networks outside saturated larger cities and achieve higher returns and long-term growth.
For example, as part of its expansion strategy in China, Carrefour is tapping into second-tier cities where its stores can be more profitable than in first-tier cities.

Expanding through franchises and joint ventures to lower risks

Whilst joint ventures and partnering with franchise operators makes it difficult for retailers to generate large profits, it allows them to expand their networks rapidly to gain a larger geographic coverage while limiting risks.

Franchise operations and joint ventures also allow international retailers to have access to the local expertise essential to succeed, and to respond to restrictions on foreign direct investment. In the case of Carrefour, this also gives the company access to retail infrastructure and prime locations, as its partner, Majid Al Futtaim, also has real estate activities.

What this report includes

Top-level strategic analysis of how major consumer trends will influence global markets
Consumer insight
Impact across all relevant consumer markets
Unique graphics and case studies
Key market snapshots
Accompanying presentation to synthesise main findings

Why buy this report

Identify factors driving change now and in the future
Understand motivation
Forward-looking outlook
Briefings and presentation should provoke lively discussion at senior level
Take a step back from micro trends
Get up to date estimates and comment

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Introduction

Scope

Key findings

Emerging Markets Power Ahead

Emerging markets as main growth driver over 2008-2013

Retail landscape: Emerging vs developed markets

Emerging markets will account for half of total retailing by 2018

S trong opportunities outside the BRICs

Strong penetration from local companies in emerging markets

From Traditional to Modern Retailing

A changing grocery landscape

Grocery shopping habits slowly shift in most regions

Modern grocery channels slowly continue to gain ground

Disparate grocery shopping behaviours

Strong shift towards modern grocery channels in Eastern Europe

Leading modern grocery players by region

Large Formats on the Rise…

Large formats: Hypermarkets on the rise in EMEs

Asia Pacific and Eastern Europe drive hypermarkets in EMEs

Stronger local hypermarket players

Opportunities beyond first-tier cities

Increasing car ownership supports larger retailing formats

Supermarkets remain the preferred format

Local players leave little space to international retailers

Case study: Carrefour adapts its strategy to different environments

Focusing on profitable stores and on key markets

Expanding new format in Brazil and Poland

…But Small Formats Still Dominate

More urban consumers in smaller households boost convenience

Convenience stores remain under-developed EMEs

Convenience stores gain share over independent small grocers

Local players dominate in Russia and Mexico

Expansion of convenience stores in EMEs through franchises

…But Small formats Still Dominate

Case study: Seven & I Holdings’ expansion in Asia Pacific

Seven & I leads convenience stores expansion in Asia Pacific

Increasing its f ranchise model to increase international opportunities

Future Outlook

Which channels will provide the best prospects by 2018?

Key take away

Definitions

Definitions and acronyms (1)

Definitions and acronyms (2)

Definitions and acronyms (3)

Definitions and acronyms (4)

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Megatrends

Strategy Briefing

Emerging Markets: Overview and Growth in Opportunities in Grocery Channels

New Report Guarantee

About This Report

New Report Guarantee

Overview

Why buy this report?

Half of all retailing sales will come from emerging markets by 2018

Purchasing habits are evolving as young and urban consumers move away from traditional channels

Modern grocery channels are gaining share but traditional formats still dominate in emerging markets

Moves towards both smaller and larger grocery formats

International retailing players lead expansion of the grocery channel in emerging markets

Smaller formats to complement large formats offer

Growing opportunities in second-tiers cities

Expanding through franchises and joint ventures to lower risks

What this report includes

Why buy this report

Want to find out more about this report?

Table of Contents

Introduction

Scope

Key findings

Emerging Markets Power Ahead

Emerging markets as main growth driver over 2008-2013

Retail landscape: Emerging vs developed markets

Emerging markets will account for half of total retailing by 2018

S trong opportunities outside the BRICs

Strong penetration from local companies in emerging markets

From Traditional to Modern Retailing

A changing grocery landscape

Grocery shopping habits slowly shift in most regions

Modern grocery channels slowly continue to gain ground

Disparate grocery shopping behaviours

Strong shift towards modern grocery channels in Eastern Europe

Leading modern grocery players by region

Large Formats on the Rise…

Large formats: Hypermarkets on the rise in EMEs

Asia Pacific and Eastern Europe drive hypermarkets in EMEs

Stronger local hypermarket players

Opportunities beyond first-tier cities

Increasing car ownership supports larger retailing formats

Supermarkets remain the preferred format

Local players leave little space to international retailers

Case study: Carrefour adapts its strategy to different environments

Focusing on profitable stores and on key markets

Expanding new format in Brazil and Poland

…But Small Formats Still Dominate

More urban consumers in smaller households boost convenience

Convenience stores remain under-developed EMEs

Convenience stores gain share over independent small grocers

Local players dominate in Russia and Mexico

Expansion of convenience stores in EMEs through franchises

…But Small formats Still Dominate

Case study: Seven & I Holdings’ expansion in Asia Pacific

Seven & I leads convenience stores expansion in Asia Pacific

Increasing its f ranchise model to increase international opportunities

Future Outlook

Which channels will provide the best prospects by 2018?

Key take away

Definitions

Definitions and acronyms (1)

Definitions and acronyms (2)

Definitions and acronyms (3)

Definitions and acronyms (4)

Why buy this report?

Want to find out more about this report?

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