GROCERY RETAILING AND LATVIAN FOOD MARKETING ?· GROCERY RETAILING AND LATVIAN FOOD MARKETING CHAIN…

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  • GROCERY RETAILING ANDLATVIAN FOOD MARKETING

    CHAIN

    by

    IngnaGulbe,Dr.oec

    June,2004

  • Data:AgriculturalMarketPromotionCenter 2

    SectorsintheLatvianfoodmarketingchainandflowofmaterialsinvalueterms,MLs

  • Data:CentralStatisticalBureau 3

    Groceryandtotalretailturnover, MLs

    0

    1250

    2500

    1990 92 94 96 98 00 2002

    Totalretailturnover

    Food,beverages,tobacco

  • Data:CentralStatisticalBureau 4

    Shareoffoodintotalexpenditures

    5147

    41 38 37 35

    0

    300

    600

    900

    1200

    96 97 98 99 00 02

    MLs

    0

    20

    40

    60

    %

    Spendingsonfood Otherexpenses Shareoffood,%

  • Data:STCConsulting,CentralStatisticalBureau 5

    Storesizes,expecteddevelopmentofretailconcepts

    Hypermarkets

    Supermarkets

    Discounters

    Otherstores

    0

    3000

    6000

    1999 2000 2001 2002

    0

    125

    250

    120-400 50-120 20-50

    400

  • Data:AgriculturalMarketPromotionCenter 6

    Purchasingcriteria

    Introductoryperiod

    trialperiod2-12weeks

    demand

    customerresponse

    margins

    Firststage

    price

    brand

    supplycontinuity

    quality

    origin

  • Data:AgriculturalMarketPromotionCenter 7

    listingfee,shelfspaceallowances,end-ofaisledisplayfees

    termsofpayment,retrospectivediscounts

    returnofunsoldunits

    specialpromotionslike3for2deals

    bulkpurchasediscounts

    specialcontributionsatopenings,remodelings,extensions,

    mergers

    replacementofweaker20%ofbrandsuponaquarterly

    performance

    Concreteconditionsofsupplyrelationship

  • Data:BalticDataHouse 8

    Atleastonshoppingperyear,%oftotalshoppers

    1

    1

    1

    24

    40

    48

    83

    86

    87

    Gasstation

    Kiosk

    Mobiletruck

    Warehouse

    Hypermarket

    Shoppingcenter

    Marketplace

    Supermarket

    Smallstore

  • Data:BalticDataHouse 9

    Numberofshoppingsperyearinlargestretailnetworks,million

    0.39

    0.72

    1.07

    0.78

    0.55

    1.21

    0.35

    0.42

    0.21

    Nelda

    Elvi

    CityMarket-Supernetto

    Mego

    RIMI

    Maxima-TMarket

    Other

    Supermarkets/conveniencestores Discounters

  • Data:BalticDataHouse 10

    Mainreasonsinretailoutletselection,%oftotalshoppers

    33

    42

    46

    38

    54

    76

    Bulkshopping

    Wideassortment

    Discountoffers

    Freshproduce

    Goodprice

    Closenesstohome

    Supermarkets

    Smallstores

    Marketplaces

  • Data:BalticDataHouse 11

    Productvalueratings,%oftotalshoppers

    29

    32

    38

    46

    46

    55

    89

    Labellinginformation

    Appearance

    Producer,brand

    Bestbefore

    Countryoforigin

    Price

    Taste

  • Data:CentralStatisticalBureau 12

    Breakdownofpercapitaexpendituresonfood2002,valueterms

  • Data:CentralStatisticalBureau 13

    Levelofselfconsumption

    0% 50% 100%

    Vegetables

    Fruits

    Dairy

    Eggs

    Sugar,sweets

    Fish

    Meat

    Oils,fats

    Bakery

    Purchased Self-consumed

  • 14

    Seriousproblemsinobtainingdataonfoodconvergenceareidentified

    Farmsales

    dataonvolumessoldthroughretailoutletsarenotcollected

    Manufacturingoutput

    only aggregatedataprovidedbyGovernmentalStatisticsareavailable

    in somesectorswithhighconcentrationevenaggregatedataarenotavailablebecauseofconfidentiality,supportedbyLaw

    Retailsales:

    retail marketproductspecificinformationofferedbyafewcommercialcompaniesisveryexpensive

    turnoverandsalesestimatesusuallydonotcorrectfirmsnon-foodsales

    nodataareavailableonspecialiststoressalesinbakery,dairy,meat,fish,confectionerysegments

    Dataandinformationissuesindeterminingtheperformanceofthefoodchain

  • 15

    lackofcommunicationandunderstandingbetweensectorsofthe

    foodchain

    fragmentedandinefficientfarmingsector

    ratherfragmentedfoodprocessing

    lowconsumerpurchasingpower

    limiteddataoncoststructures andsalesvolumesnecessaryforin-

    depthanalysisofthefoodchainperformance

    growingimpactofcross-borderallianceswithingroceryretailing

    limitedpossibilitiestoprotectdomesticagriculturalproduction

    MainproblemslimitingthecompetitivenessoftheLatvianfoodmarketingchain

  • 16

    creatingofaconstructivedialoguebetweenpartnersinthefoodchain

    bettercommunicationwiththeconsumers,includingmoretargetedmediacoverage

    assistancetoproducers,betterequippingthemtomeettheneedsofthemajorplayersinthemarketquality

    ProposalsforincreasingthecompetitivenessofLatvianfoodmarketing

    chain MinistryofAgriculture

    CooperationBoardofLatvian

    AgriculturalAssociation

    FederationofLatvianFood

    Processors

    TradersAssociation

    LatvianStateInstituteof

    AgrarianEconomics

    MarketingCouncil

    Parties involved

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