ESM: The Biggest Stories Of The Year - 2016

By Steve Wynne-Jones
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ESM: The Biggest Stories Of The Year - 2016

The birth of a new year is a time to reflect on the outgoing annum, and look forward to the next. 2016 held great controversy and tragedy - the election of Donald Trump, the ongoing Syrian conflict, and horrific terrorist attacks. But it was also a turbulent year for the retail and FMCG sector, with takeovers, demergers, and the aftershocks of Brexit running throughout Europe. Let's look back on a year of disaster and triumph, with a round-up of the newsmakers of the year.


During the bright start of a brand new year, French retailer Carrefour and Russia's X5 Retail Group celebrated increased full-year sales for 2015, whereas Casino Group rushed to reassure investors after Standard & Poor put it on a negative watch. Dutch and Belgian companies Ahold and Delhaize also moved closer to their planned future merger.


Inching closer to the Brexit referendum, UK supermarket chains refused to get political and sign an anti-Brexit petition. Other big stories included the sales decline of Wal-Mart's subsidiary Asda due to a resurgent Tesco, and Spain's DIA group posting sales of over €10 billion. Carrefour faced controversy as its offices were investigated by authorities for its agrifood pricing structure.



This month saw Sainsbury's bid £2 billion for the Argos retail chain, while German retailer Metro Group announced its plan to split its Real hypermarkets and Cash & Carry food wholesale stores from the Media-Markt and Saturn electronics chains in order to boost its value. France's Casino Group got into hot water when short seller Carson Block claimed it had inflated 2014 earnings by €203 million, claiming more profit from real-estate transactions than it should have.


Previously ailing retailer Tesco released its flat full-year results, which analysts considered a positive step forward for the company after a record loss last year. Swiss chain Migros posted positive results, despite a difficult domestic market; and Germany's Edeka saw its sales rise 2.7% in 2015. Fellow German retailer Rewe Group posted a record turnover in 2015 with revenue growth of 3.7% to €52.4 billion.



Data firm Nielsen reported the slowest price increase for everyday grocery items across Europe in six years, with FMCG value sales rising only 0.7%. In the UK, overall shop prices experienced deflation of 1.7%, continuing a three-year trend of decline. Retailer Morrisons reported its second consecutive quarter of sales growth, signalling a successful turnaround engineered by new CEO Dave Potts after a four year slump. Baltic region retail group Maxima also had a good year in 2015, increasing its annual turnover by 3.7%.


Britain's astonishing decision to leave the European Union caused retail intelligence firm Verdict Retail to predict a 'high level of volatility' in markets. Analysts Bernstein Research also predicted that the UK food retail market was likely to be 'more defensive' after the vote. In other news, Mercadona announced its plans to open four stores in Portugal in 2019, its first venture outside of Spain. Leadership changes in the FMCG industry saw Spar International elect a new president, while Wal-Mart China's former head Sean Clarke took the top spot of UK arm Asda.



It was the month of the takeovers - Sainsbury's takeover of Argos parent Home Retail Group was approved, and South Africa's Steinhoff International Holdings bought discount chain Poundland for $794 million. French retail groups Système U and Auchan scuttled plans to exchange products due to technical complexities. The freshly-merged Ahold Delhaize also revealed its new lion and crown logo.


Global convenience chain 7-Eleven opened its 60,000th store, and Ahold Delhaize forecast a boost to second-half profit for its Dutch operation, when second-quarter earnings beat analysts’ estimates. Nielsen revealed that grocery spending across Europe grew by the lowest level on record, rising by 0.7% in the second quarter of 2016.



UK shoppers alarmed by the Brexit vote grew in confidence after initial economic fears weren't realised, market research institute GfK reported. German retailer Metro Group revealed more information about its demerger plans. In Eastern Europe, Poland suspended a controversial levy on retailers after a probe by the European Commission.


Tesco's spat with Unilever over price rises in the 'Marmitegate' scandal highlighted retailers' difficulties arising from the weak British pound. The retailer also made news in Ireland when it dropped to third place in supermarket rankings, according to Kantar Worldpanel figures. Trouble continue for UK retailers, with a Marks and Spencer insider revealing that the group would close its flagship Paris store in order to cut costs and innovate.


The shock election of Donald Trump as President of the United States forced industry leaders to evaluate the impact his presidency may have on retail. Tesco made headlines again when its chief executive Dave Lewis warned suppliers not to hike prices. In other news, Dunnes was crowned the lead supermarket in Ireland, and an enraged Iceland (the country) threatened legal action against Iceland (the company) due to trademark infringement.


The festive season was a chance to look forward for many retailers: Rewe Group named Lionel Souque as the successor to current CEO Alain Caparros, taking over in 2019. Reports stated that Carrefour could name its new CEO to follow Georges Plassat as early as next May. Ahold Delhaize also revealed its 'Better Together' integration strategy for the future. Finally, Metro Group's chief executive Olaf Koch said that the company was in a very 'robust' situation, after posting a 0.2% rise in like-for-like sales for the full-year 2015/16.

© 2016 European Supermarket Magazine – your source for the latest retail news. To subscribe to ESM: The European Supermarket Magazine, click here.

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