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Inflation: how large retailers are adapting

2022-06-21T08:53:32.482Z


Thanks to its communication strategy, Leclerc won a majority of market shares. But the other major retail players are stepping up their efforts to remain competitive.


The purchasing power of the French is largely impacted by inflation, which reached 5.2% over one year in May, according to INSEE.

Prices are rising, especially in supermarkets, with an increase of 3.81% in May, all circuits and products combined.

A level not reached for 14 years.

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Read also“Even dishwashing liquid has increased”: in the face of inflation, the daily sacrifices of consumers

To attract customers, large retailers are increasing marketing operations and strengthening their communication.

Among the winners, Leclerc won 0.2 points of market share between March and May, for a total of 22.4% established between April 16 and May 15, according to analyst Kantar.

Note that since 2018, Leclerc has positioned itself as a leader in mass distribution.

The group particularly stands out during this period of inflation, in particular thanks to several factors, as explained by Philippe Goetzmann, retail expert: “

Leclerc covers a large part of France, with 570 hypermarkets.

The brand has always claimed to be the cheapest and their mission is the purchasing power of the French.

They are very talented in their communication.

»

Leclerc, pioneer of communication

Operations at cost price, fixed price of the baguette or even low-cost electricity offers... Michel-Edouard Leclerc, CEO of the group, multiplies the announcements.

This "

pioneer of communication

" takes first place in the AmazingContent ranking of the most influential managers in mass distribution.

It is “

neat but authentic communication, always in a current or even familiar register, which reflects the image of a leader close to consumers

”, notes the study.

Thanks to this strategy, "

Leclerc has gained four points of market share in a decade

", underlines Frédéric Valette, director of the Retail department of Kantar.

He adds that "

the distributor has been very proactive with its drives

", which allow you to order your shopping online and pick it up directly in store.

Of all drive-through spending, all stores combined, Leclerc represents nearly half of sales on this channel

,” notes Frédéric Valette.

Carrefour relies on proximity, Intermarché on its loyalty card

Faced with Leclerc, Carrefour and the Les Mousquetaires group (Intermarché) share the next two places on the podium, with 19.8 and 15.9% of retail sales respectively.

If Intermarché gains 0.2% market share, Carrefour loses 0.3% between March and May, despite a significant recovery for two years.

The former management of Carrefour considered that the drive was not a strategic axis.

Today, the brand is banking on digital and on its vast network of convenience stores, in particular via delivery applications such as

Uber Eats

or

Deliveroo

”, specifies Frédéric Valette.

In the first three places are Leclerc, Carrefour and the Les Mousquetaires group, which have the largest market shares of large retailers.

Kantar

On June 6, the brand launched its “

tight prices

” on 220 major brand products.

The objective, "

low prices

" on basic necessities such as Lotus toilet paper, Ariel washing powder, Carte Noire coffee or even Tropicana orange juice.

According to the A3 distrib agency, the number of promotional offers from Carrefour hypermarkets increased by 21.5% from January 1 to mid-May 2022, compared to the same period last year.

Also read E.

Leclerc and Carrefour opt for bulk

For his part, Vincent Bronsard, president of Intermarché, last week promoted the loyalty card on BFM Business.

This free card “

offers up to 10% reduction on some of our brands.

It concerns nearly 2,000 references such as Paquito, Pâturages or Chabrior

,” he said.

The most modest are also entitled to a 5% discount each day.

The only condition is to be a CAF or MSA recipient and have a family quotient of less than or equal to 850 euros.

This offer operates within the limit of 20 euros per month, on all races, excluding alcoholic beverages.

Cost prices at Système U and Casino

The U group comes in fourth place, with 11.5% market share in May, a figure equivalent to March

.

To attract consumers, the brand relies mainly on products at cost prices.

A measure that System U has offered every week, since the start of the Covid-19 crisis, on four fruits and vegetables.

This week, the kilo of apricots is for example at 2.59 euros.

But Philippe Goetzmann points to a lack of communication: “

The group is extremely good in terms of its price positioning, but it's not well enough known.

He tries it.

»

With 7.1% market share, Casino remains stable, gaining only 0.1% between March and May.

Like Système U, the group also sets up operations at cost prices.

In mid-May, the 400 supermarkets offered to reimburse in vouchers all the euros or cents spent by customers, which exceed the cost price of fruit and vegetables.

A “

0.85 euro fuel operation

” is also organized every weekend, within the limit of a maximum of 50 liters of fuel.

In addition to these operations, the group offers a Casino Max subscription, which allows customers to benefit from a reduction of 10% per month on the entire store.

Since May 3, the subscription of 10 euros per month is offered at the price of three euros for students and seniors.

Lidl restores its image

Lidl, with 7.8% market share and 0.2% loss in two months, “

is still progressing very clearly and doing a lot of advertising

” observes Frédéric Valette.

Unlike its competitors, the group is relying on another strategy: the renovation of its stores.

Gone are the beige tiles on the floor and the aging appearance of the shelves, make way for the modern and bright Lidl.

The brand has thus straightened out the way its stores are run in order to offer a better welcome to customers.

For several years, Lidl has been renovating its stores to offer a better welcome to its customers.

Twitter

Lidl's historic slogan promises "the

true price of good things

" by offering few national brands, in favor of distributor brands.

Lidl is frequented by more than 60% of French households, which is high.

But the level of customer loyalty is still quite low, so Lidl has significant development potential, especially with its Lidl Plus app

,” adds Frédéric Valette.

Read alsoWith its loyalty program, Lidl captures many customers

Until July 31, the German distributor offers an operation, called “

the boost that is worth it

”.

In concrete terms, once a month, customers with Lidl Plus will be able to benefit from a 5% reduction voucher, valid on all their shopping, from a purchase of 50 euros.

The coupon will automatically display on July 1st and August 1st.

All you have to do is activate it one day in the month and scan it when it goes to checkout.

Source: lefigaro

All news articles on 2022-06-21

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