Retail and specialized distribution: 2010 year-end results

Here's an excellent report à on the end of 2010 from the généraliste et spécialisée retail sector, with a special focus on the leading chains foundé on LSA and which I wanted to share with you.

The worldés stock markets may be dinging, the Eurozone may be flying high, or the ÉUnited States may be going bankrupt in a few months' time, but Franceés retailers have had a good 2010. There's no guarantee that 2011 will end just as well, but given the setbacks they suffered in 2008 and 2009, they're not about to sulk! According to the exclusive rankings écompiled by consulting firm PricewaterhouseCoopers (PwC) for LSA, 76 of France's 100 leading retailers recorded ésales growth in France last year. Twenty more than in 2009. « In total and à on a comparable basis, this top 100 saw its sales increase by 3.8% », calculates Olivier Vialle, partneré at PwC and co-pilot of the étude. Thus, food retailers are right in the middle, with sales up 3.4% on à 2009.

This increase, or at least this return à to pre-crisis « results » is à to be put down to a positive fuel effect on 10 à 15% of sales. « This bias may mask performances that may have êbeen weak, particularly at Carrefour », analyzes Olivier Vialle. With sales of more than 44 billion euros for the group in France in 2010, the various banners of the Carrefour group appear to have posted only a slight decline of 1%. But if the positive impact of fuel and expansion is subtracted, the decline in sales at the core would be more like 3%. Carrefour hypermarkets have thus gone from 13% à 12.5% of market shareé. Thatàs not going to win any points à Lars Olofsson, Group CEO.

Carrefour's bad patch benefits à its direct competitors

Competing Système U and E. Leclerc have been quick to take advantage of the French géantçs mistakes. In 2010, Serge Papinés members gained 6.3% in hypermarket sales and 5.6% in supermarket sales. Better still at Leclerc, where sales in France reached 34.8 billion euros, an increase of 6.5%, and whose market share égrew éover the same period from 18.3 à18.8%... exactly the half-point that Carrefour's hypermarkets now lack. « The groupings are doing much better » notes Olivier Vialle of PwC. And Intermarché is confirming this with a bang, beating Carrefour hypermarkets to second place! After a 4.1% increase in sales, it has passed the 25 billion euro mark for sales in France.

Intermarchés success has been confirmed.

To succeed in DIY and gardening, you had to êbe a Mulliez in 2010. While the sector increased sales by €476 million (+2.6%), Leroy Merlin and Bricoman, the Adeo Group's banners, captured more than three quarters of this, or €394 million. Weldom's sales fell by 9%, mainly due to à the closure of 23 stores. In fact, this market é has été favored intégréseaux. « Franchiseséoften have small unitséwhereas with the crisis, people want more choice, more prices » says Sabine Durand-Hayes, partner at PwC. Mr.Bricolage has suffered greatly, with sales down 4.5%. Retailers who made the switch to déco also fared better. Castorama, which is making great efforts in this direction under the management of Guy Colleau, gained 5.1%. With the economic crisis, the French are keen to buy small accessories to give their interiors a makeover à at a lower price. Jardiland has also made a quantum leap, increasing its sales by 21 outlets from 554 à 765 million euros. The personal goods émarket, meanwhile, seems at last to be recovering. Hard hit in recent years by a downturn in consumer spending, the 25 companies in the top 100 achieved cumulative sales of €18.5 billion, an increase of 5.3%. Four of these companies stand out from the crowd. Ventes- privées, with an increase of 16.1%, maintains a very steady pace of growth, even though it is down on à 2009 (+ 24.1%). Kiabi and Celio also impressed, with sales up by 24.1% and 28.5% respectively. The first region finally reaped the rewards of the integration of the Véti network (50 more stores), while the second region benefited from a vigorous expansion policy. « With 110 stores added in two years, Celio has enjoyed two years of very rapid growth è» analyzes Olivier Vialle. The people in charge of development didnét chômé! Finally, Promod moved up from 95th à to 90th place, with 431 million euros (+ 12.4%). Only 3 Suisses (- 2.8%) and Alain Afflelou (- 1.1%) saw a notable decline in businessé.

Contrasting évolutionsées

The équipement de la maison players have seen évolutions much more contrastingées. À starting with Saturn. After a 16% drop in business, Saturn last appeared in the rankings, having since been taken over by rival Boulanger. In the home furnishings sector, But and Conforama confirmed their renewed healthéwith increases of 7.4% and 4.8% respectively. Their competitors, however, clearly suffered, as Ikea (+ 2.4%), Alinéa (+ 3.3%) and Fly (- 0.3%) suffered substantial falls in sales in the same period. They may be able to revive their fortunes in 2011 on the back of the kitchen boom. The Schmidt Group, a specialist in this sector, grew by 13.2%, i.e. 64 million euros more than in 2009.

The Schmidt Group, a specialist in this sector, grew by 13.2%, i.e. 64 million euros more than in 2009.

Cété culture and entertainment, 2010 did not été tender. Sector sales fell ées à 10.59 billion euros (- 1.4%). Fnac lost more than 4% of its sales, while Virgin Megastore suffered a historic decline of 15.4%. While amazon.fr posted à double-digit growth, it was, at the very least, with an estimated ée à 10% increase, a far cry from the ultra-rapid growth of recent yearsées. « Thereés a real matérialization effect," says Olivier Vialle. The DVD is à out of breath, the CD continues to fall and, while 2010 was éa small yearéfor video gameséo, it too is little à woné by piracy. » Is the déroute of cultural products an inevitabilityé ? Not sureûr. Relay and France Loisirs have achieved growth of over 4%. And Le Furet du Nord, just outside the top 100, had a good year. The French also showedétheir interest in sports. Décathlon and Intersport also àincreasedîtheir sales at the mètre carré, while continuing àto grow.

Surprisingly, the yearés performance confirmedéthe resilience of the sectorés heavyweights. Even though they invested less than in 2009, the likes of Celio, Kiabi, Darty and Leroy Merlin benefitedé from the upturn in consumer spending in 2010, thankséto the strategies initiatedésèd the end of the crisis. New concepts, new ranges, rapid expansion... Anything goes, including buying out a competitor. Après Vêti taken over by Kiabi in 2010, Saturn by Boulanger in 2011, who will be next? Clearly, Virgin Megastore is àat a turning point in its history, and its boss, Jean-Louis Raynard, will have to make some decisive strategic choices in the months àahead. As for à Go Sport, although its shareholder is solid (Casino), it still can't see the end of the tunnel. If these preys are attractive, potential buyers will have to bear in mind à the risks of a épossible downturn in the éeconomy. « We have witnessed é à the end of the érosion in sales à on a comparable surface, but we cannot yet speak of a rebound. The 100 leaders are not "outperforming", with 2% GDP growth in 2010 », warns Sabine Durand-Hayes of PwC.

Source LSA.fr