New store formats are contributing to the evolution of the Italian retail sector, a new study has found.
An IRI study has revealed that the emerging formats include those which focus on assortment specialisation, high-end products, customer service, diversified promotional and price strategies, and neighbourhood shoppers.
New Formats
The emerging formats have seen above-average performances, compared to traditional hypermarkets and supermarkets (+1.5%).
The best performer (+5.5% on 2017) is the so-called 'Best Prossimità' category, which includes successful small and medium-sized proximity stores (from 200 to 1,000 square metres). Also performing strongly are 'Every Day Low Price' (+4.5%), or EDLP, stores, characterised by low or no promotional activity. Elsewhere, 'Best Promo' (+4.4%) stores, with successful low-to-high promotional strategies, are also seeing good growth.
Other new formats include 'Top Freschissimi' (+3.6%), which have seen success with fresh, variable weight products, as well as fruit and vegetables; and 'Premium' (+2.1%), which feature a strong presence of high-end products, with attention to local food and specialties, and a particular focus on service.
All formats are very competitive with each other in terms of price positioning, with the exception of Premium stores.
Private-Label Focus
Another element of diversification is the focus on private-label brands. For EDLP (28.1% private label share) and Best Prossimità (23.4%-26.1% share), own-brand represents a fundamental part of their strategy. There was less focus on private label in the Premium format (16.8%), which relies more on high-end products.
The highest promotional pressure has been seen in the Best Promo format, slightly above supermarkets and hypermarkets. On the other hand, promotional pressure has remained at less than 10% in the ELDP format, with the exception being the fixed weight fruit and vegetable department.
In terms of top-selling products, the service aspect is predominant in the Premium format, variable weight dominates in the Top Freschissimi format, while products satisfying the basic and service needs led the ranking in the Prossimità channel.
© 2018 European Supermarket Magazine – your source for the latest retail news. Article by Branislav Pekic. Click subscribe to sign up to ESM: The European Supermarket Magazine
