Increasing turnover, doped by inflation, but declining margins. In a context strongly marked by the skyrocketing cost of living, the growing propensity to save of consumers and the sharp decrease in the purchasing power of families, which rewards discount stores and the private label of the distributor to the detriment of that of the manufacturer.
This is the reality with which the insignia of the brand are confronted today Large Italian distribution (Gdo) food, according to the new edition of the Study Area Observatory Mediobanca. The large-scale distribution has a storm on the horizon given that the current crisis is discounting the combined effects of the war in Ukraine, geopolitical tensions and uncertainty on the prices of raw materials. And maybe he doesn't have all the tools to protect himself. But let's see what emerged from the Mediobanca survey which aggregates the economic and financial data of 130 national companies and 31 major international players for the period 2017-2021 (for Italy, coverage is estimated at 97,6% of the market).
Italian large-scale distribution: 2022 between certainties and unknowns and expectations for 2023
According l 'Mediobanca investigation, preliminary data from large listed international retailers indicate sales in 2022 an increase of 7,8% but with a drop in industrial margins of 6,2%. On the other hand, for the Italian large-scale distribution, sales growth of 2022% in 6,7 is expected with the Ebit margin falling to 1,4% from 2,4% in 2021. Inflation threatens the stability of demand, which is declining by 6% in January 2023, eroding consumers' purchasing power despite for 2023 a further increase in sales of 2,8% is expected. The high prices pushes consumers up private label products (Mdd) which will reach sales of 2022 billion in 12,8 (+9,4% on 2021) and the discount projected over 22% of the market (17,4% in 2017).
Dynamic organized distribution
The concentration of the Italian market is stable: the market share of the top five retailers is equal to 57,1%, remaining above that of the Spain (49,8%), but far from Netherlands (80,1%) France (78,4%), Britain (75,4%) and Germany (75%). Strong dynamism in organized distribution: the relative weight went from 33,3% in 2017 to 37,9% in 2021. In the period 2018-2021, 14 independent operators entered the perimeter of organized distribution, another 5 moved to inside the segment. VéGé is the operator that has attracted the highest number of new associates (9), D.IT associated 3 companies, two new entries for Selex e philanderer and one each for C3, Agora e despar.
Individual operators: sales boom for MD
Returning to Italy, the Observatory shows that MD is champion of sales growth between 2017 and 2021: +9,7% annual average, followed by Lidl Italy (+ 8%) and Agora (+7,6%). They follow the discounter Eurospin (+ 6,9%), Conad (+ 6,7%) and Selex (+5,2%). In the last year, Agorà and Eurospin achieved the best performances (+7,7% in both cases), ahead of Lidl Italia (+6,7%) and Finished for Canova (Hyper-Unes) (+6,6%). Close to the top positions we find MD up by 5,6% and Conad (+5,5%).
However, in terms of return on invested capital (Roi), Eurospin is in first place with 18,2%, followed by MD (15,1%) and Lidl (11,3%). Eurospin claims to be the queen of cumulative profits between 2017 and 2021: 1.286 million, exceeding Esselunga (1.195 million).
The “hidden champions” for growth and profitability
Organized distribution companies with turnover exceeding 500 million there are 25, from the Unicomm Group with 2.413 million, to Migross with 509 million. The Arena Group has the best return on invested capital (Roi) index in 2021, equal to 23,4%, followed by thirteen other groups with double-digit indices. The largest increase in turnover in 2021 was achieved by Abbi Holding (+34,1%), which outdistances the Tosano Cerea Supermarkets, up by 14,9%, Mega Holding (Megamark), by 12,2%, and Retail Evolution Holding (Iperal) by 11,2%. In aggregate, the twenty-five operators have a turnover of 26,7 billion, they grew by 2021% in 4,1 and score an average Roi of 7,6%.
The major international operators
In 2021, the major international retailers recorded a turnover ranging between 501,3 billion in the US Walmart and the 20,9 billion of the Portuguese Jeronimo Martins. These operators invoice 17% of their turnover in points of sale abroad: the greatest international projection is from the Dutch Ahold Delhaize (78,3%), followed by Jeronimo Martins which sells mainly in Poland (76,2%), by the Japanese Seven & i (60,4% mainly in North America) and by the French Carrefour (51,6%), Casino (47,3%) ed Elo Auchan (46,9%). The international panel expresses an average Roi in 2021 of 10%, up compared to 9,4% in 2020.
Eurospin in second place after Target
Even in 2022, the dominance of American companies in global retail continues, but Italian players are showing excellent signs of growth. The classification for Roi sees the American on the podium Target (30,1%), followed by the Italian Eurospin (18,2%) and the other US Walmart (17,8%). Two other Italian discounters, MD (2021%) and Lidl Italia, are also above the average of the international panel for Roi in 15,1 which, with a Roi of 11,3%, exceeds that of the German parent company Lidl Stiftung (9,2 %). As for sales per square meter on its domestic market, the primacy belongs to the British J Sainsbury (15.500 billion) pressed by Esselunga at 15.300. Follow the Canadian Empire (12.000), the other British Wm Morrison (11.900) and the two Australians Woolworths (11.500) and Coles (11.400). A short distance from Esselunga we find VéGé at 1.078 million and Selex (1.056 million). Bad instead for Carrefour which has accumulated losses of 766 million, Coop for 410 million e Penny Market for 43 million. Coop Alleanza 3.0 is the largest Italian cooperative with sales in 2021 of 4.301 million, followed by PAC 2000 A (Conad Group) at 3.921 million and Conad Nord Ovest at 2.671 million, preceding Unicoop Firenze at 2.349 million.
The sustainability chapter
Large-scale distribution companies deal extensively with the topic in dedicated sections of their websites. The presence of dedicated reports affects 51,5% of companies: more common among organized distribution operators (54,2%), less among discounters (40%), sporadic in large-scale distribution (14,3% of operators) . On environmental issues, the profuse commitment to reduce the environmental impact has led to quite satisfactory results: since 2019 energy intensity has dropped by 15% and carbon by 14,4%. Waste production also decreased (-3,7%) reaching 68,3% in the component sent for recovery.
