just-food Editor's Weekly Highlights

just-food.com October 19, 2009
Issue 494

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just-food.com editor's weekly highlights

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Editorial

just-food editor

A new week - and news already of two M&A deals struck (or set to be struck) in food retail.

Minutes after arriving in Cannes in the south of France for the annual TFWA duty-free and travel-retail exhibition and word reaches just-food that Dutch grocery retailer Super de Boer has agreed to a takeover offer from Jumbo, one of the two local bidders for the business.

Further east and it looks like South Korean retail business Lotte Shopping is set to buy Chinese supermarket operator Times as the consolidation of that retail market continues in earnest.

After 12 months of economic despair, the corporate strategies of food retailers are in the spotlight. Assets are available as highly-leveraged businesses struggle and, amid signs of green shoots in a number of markets, now could be an opportune time for the strongest retailers to expand.

As we reported a couple of weeks ago, the sale of Super de Boer will come as a great relief to French retail giant Groupe Casino. Casino, which owns a majority stake in Super de Boer is in the middle of selling off a number of assets. And the disposal of its interest in the Dutch retailer (an asset some have questioned since Casino bought into Super de Boer in 2002) will help bolster the French retailer's bottom line - especially at at time when operating results are less than convincing.

Questions are also being raised over the expansion strategy at Casino's fellow French retail titan, Carrefour.

The company stunned the industry on Thursday (15 October) when it announced it would quit Russia - just four months after entering the market. Some may argue Carrefour's swift exit makes sense but the decision-making process at the world's second-largest retailer should be under the microscope after what amounts to an embarrassing U-turn - particularly when fellow French retailer Auchan continues to expand in Russia.

just-food will have the duty-free and travel-retail channel in its sights over the next few days as we seek to test the pulse of the confectionery players in the sector. The US$3bn business attracts some of the world's major confectioners (think Cadbury, Kraft Foods, Nestle and Mars) but, with travel numbers under pressure, the sector is not as buoyant as at other times in the Noughties.

That said, confectionery sales in duty free and travel retail have fallen less far than other more upmarket categories in the last year, with chocolate and candy makers highlighting the relative affordability of their wares.

However, as figures released in the UK this morning show, passenger numbers, and crucially business passenger numbers remain weak.

Those heading to Cannes today are unlikely to be in a mood that matches the sunny weather on the French Riviera.

Until next time...

Dean Best, Managing Editor

Web: www.just-food.com
Email: editor@just-food.com
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