BMI's Executive Summary

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Italy's fragile economy was predicted to register relatively strong growth of around 1.8% in 2007 following similar levels of growth in 2006. By historical standards this is good news for Italy and this has fed into consumer confidence leading to a rise in consumer spending. This, coupled with growing acceptance of the supermarket and hypermarket formats, has led to moderate expansion in the MGR sector. However with many retailers having had experience of previous false dawns when it comes to the Italian economy, and several still struggling to get to grips with enigmatic Italian consumers, the pace of outside investment remains moderate as retailers wait to see if this current economic recovery is sustained.

The Italian MGR sector is one of the most fragmented and least saturated in Western Europe and many of the leading brands exist as networks of smaller companies, including the two largest chains in Italy – Conad and Coop Italia. On the surface this would suggest there are opportunities for the big global retailers to expand rapidly in the Italian market. However, complicated planning regulations that favour smaller retail formats, plus the fact that nearly all Italian MGRs belong to a buying group, mean that market entry is hard for retailers without a local partner. Peculiarities of the Italian market have also meant that foreign retailers have often found it hard to grow their revenues as they struggle to attract Italian consumers away from the retail brands and formats they are familiar with. For example, although consumer spending has reportedly grown in Italy this year, this is not reflected in the revenues of France based retailer Carrefour, which operates 57 hypermarkets and 468 supermarkets in Italy. For the first nine-months of 2007 Carrefour's sales fell by 2% at its Italian stores. Carrefour has blamed this poor performance on its network of Carrefour hypermarket stores that Italian consumers just don't seem to find appealing and has outlined plans to dispose of some of the worst performing stores.

However, French based retailer Auchan, operating in the supermarket and hypermarket sector, opened seven franchised hypermarkets in Italy in 2007, suggesting that its own hypermarket stores are performing reasonably – highlighting the perplexing anomalies that exist in the Italian MGR sector. The fact that some retailers are managing to make headway in this inscrutable market is highlighted by two recent acquisitions of substantial size. In November Germany based Rewe acquired La Centrale Lazio Spa, which operates eight supermarkets under the Mart banner in central Italy; in a separate development SPAR Austria acquired 62 Pellicano supermarkets owned by the Italian Lombardini family. This second development in particular is of significant size, suggesting that SPAR Austria is having considerable success with its current Italian operations. The Italian market continues to be mysterious and it is hard to differentiate what makes certain stores perform and others not; however, the market remains tempting because of its lack of maturity and any retailer that strikes upon a format that is popular with Italian consumers is very likely to reap significant rewards in the future.

Contents

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Chapter 1: Business Environment

SWOTs

Italy Food, Drink & Retail Industry SWOT

Macroeconomic Outlook

Table: Italy - Macroeconomic Forecasts

Chapter 2: Retail

Regional Overview

Discounting in Western Europe

Table: Types of discount stores - Western Europe

Table: Leading Discount Store Operators - Europe* 2005

Industry Forecast Scenario

Table: Retail indicators

Company Developments

Market Overview

Table: Structure of Italy's Mass Grocery Retail Market by Number of Outlets

Table: Sales Value by Format in Italy's Mass Grocery Retail Market (US$mn)

Table: Average Sales Per Outlet By Format – 2005

Chapter 3: Food & Drink

Regional Overview

Bottled Water in Western Europe

Table: Leading Bottled Water Manufacturers by Country - Western Europe

Industry Forecast Scenario

Table: Food consumption indicators

Table: Food/Drink sub-sector indicators

Table: Drinks indicators

Table: Sectoral trade indicators

Company Developments

Market Overview

Chapter 4: Tobacco

Industry Forecast Scenario

Table: Tobacco indicators

Industry Developments

Company Developments

Market Overview

Chapter 5: Competitive Landscape

Key Players

Key Players in Italy's Mass Grocery Retail Sector - 2005

Table: Key Players in Italy's Food & Drink Sector - 2005

Table: Key Players in Spain's Food & Drink Sector - 2005

Regional Company Case Studies

Metro Group in Western Europe

Table: Metro Group - Number of outlets by country and fascia 2004 & 2005

Table: Metro Group - Fascia statistics

Unilever plc/Unilever NV in Western Europe

Table: Unilever - Food & Beverage - Main Brands by Country - Western Europe

Table: Unilever Sales by Geographical Area 2004 & 2005 - Continuing Operations

Table: Unilever - Principal Group Companies Western Europe

Nestlé In Western Europe

Table: Nestlé in Western Europe - The Figures

Carlsberg In Western Europe

Table: Carlsberg Sales (US$) & Growth (%) by Region - 2005

Table: Carlsberg Sales (US$) & Growth (%) by Region - Q106

Table: Carlsberg Regional Strategies

Table: Carlsberg Operations in Western Europe

Company Analysis

BMI Forecast Modelling

How we generate our industry forecasts

Retail Industry

Sources

Competitive Landscape for Europe Food & Drink Reports: Sample of  
Companies Ranked

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At-a-glance perspective on the strengths, weaknesses, opportunities and threats facing each market’s food & drink industry. BMI also provides similar economic and business environment studies. Company SWOTs (Strengths, Weaknesses, Opportunities, Threats) covering all leading food and drink companies operating in each market, including competitive intelligence on geographic presence and competitive positioning of multinationals against local companies; leading products, services and brands; sales and local market share; foreign direct investment, projects, partners and acquisition strategy. Illustration of the industry via rankings tables comparing revenues, number of outlets, number of employees and registration dates. BMI analyses each company’s performance, market position, strategy and investment potential.

Network of European Food Sources

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BMI's European Food Reports are based on an extensive network of multilateral organisations, government departments, food industry associations, chambers of commerce and company reports. Information sources include: