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Casino enter Romania with their private labels

21/01/2013 08:23

Casino, one of the most powerful French retail networks, enters on Romanian market with their private labels. Would the  simple selling of products be so important for the turnover of over 34 billion euro of the Group, or is it a strategic movement with medium and long time effects?


The appearance of the Casino private brands on Romanian market is surprising, mostly because the Group never declared their intention to officially enter any other European market. Their only operations on the old continent are located in France, their country of origin, where most of their stores are placed. Movement is so much more surprising as we do not talk about parallel imports  conducted through small apartment companies, but about a full-fledged partnership concluded with a retail network. Moreover, the assortment already existing on the market contains about 50 items structured on 5 main brands. So, we remark a strategy carefully thought with possible effects in time.

The history of private brands mentions only a few of such cases. The retailers rather prefer to develop private brands according to their own strategies than to assure distribution for others. The most recent case was recorded by the end of 2011, when the New Zeeland network Nosh took over about 100 products from the portfolio of the English retailer Waitrose. Noah people's strategy was going after the development of an international  range, and Waitrose was the best example due to the tracing of their products. 

There are of course isolated cases, when we assist to taking over of a product or of a line of products. The famous coffee Amaroy, private brand taken from Aldi portfolio is such an example  occurred on the Romanian market; but this is a taking throught distributor and by no means through a retail network.


Mega Image - Casino partnership

Mega Image sells the Casino private brands in their stores as a first. The assortment already enlists about 50 items united under five of the French retailer‘s most important brands. It is an attentive selection, structured on Mega Image consumer's profile, which covers the most diverse tastes. We can notice first price products, under the entry level brand Tous les jours, also mainstream under brand Casino, but also variations on niche segments like products with Fair Trade spices. Casino family fills in the offer of children food, while Casino bio is directed towards those preferring organic products. The selection is completed with a few refined items, united under private brand Casino Délices.

The partnership between Mega Image and Casino raises some question marks. Such an agreement is not concluded locally. You cannot take over full lines of private brands and trade them without the owners' approval. The decision most probably was taken at high level, even more as it implies major effects in the strategies of both groups.

For Mega Image, the partnership with Casino is so much more interesting in view of the retailer's vast experience in the private brands domain. The Delhaize Group's know-how and their negotiating force, sustained by strong national networks of stores, have created in time an incredible diversity of assortment. The private brands assure a differential for the Group in front of other retail networks. And then, had Mega Image actually needed these additional items, especially considering that some of them are competitors of their own brands directly? Yes, there are some unique items, or with a high degree of innovation. For the majority, their presence on shelf creates an additional pressure on the existing items. We can talk about a securing of the category through private labels, but is it worth the price ?


Casino, a centenary brand

For many people, the history of the private brands is connected with the name of Casino. Appeared in 1901, the Casino products sanctioned the birth of  the private brands, known in France as "distributors' marks". For more than a century, their presence created trends and opened new categories. The products developed by the Group impose with an excellent ratio quality-price, but also with the attention for the detail, in an laudable respect for the consumer. Details on the ingredients, ideas for a daily equilibrated diet, games for children or index of product carbon path are only a few of the informations to be found on the packages. Behind the products there are strong manufacturers, with tradition in the field. Here a single example: muesli under the brand Tous les jours are made by the German company H&J Bruggen. A company with tradition and  more than 150 years of experience, who does not give back from making an item on entry level segment.

We have to admit that among the Casino products to be found now in Mega Image stores, there are unique items as well. We noticed a high added value at the organics under brand Casino Bio. The line of soups in TetraPak brings two special items, unique on the market. There is a line of pasta next to them, outcome of the French ecologic agriculture.

Two unique items are to be found in the milk desserts category. In fact, the two items open a new sub-category on the Romanian market: the milk desserts not requiring controlled temperature. Their packing is not the classic plastic cup, but metal preserve, with ring, weight of 570g.

The analysis of the shelf price reveals another aspect, seemingly insignificant at the first sight. The Mega Image prices for the brands and products Casino are inferior to those applied on the French market. The difference is minor, coming probably from the exchange rate. For years the retail offered us the same justification: the price difference of the products coming from thousands of kilometers distance are derived from transport costs. Here however, it can be done differently, and the prices can be equalized independent of their place of selling in French or Romanian stores. An additional motive of anxiety  for the competition.


Romania, a future market for Casino Group?

Casino decision is surprising. Would Casino Group be so interested in selling their private labels on third markets through partnership with local networks? Does the volume sold in Romania counting so much in the Group's turnover, or has our country became interesting for the Group? These are normal questions wherefrom a number of scenarios can arise. The Intermarche exit and selling of Real left a few unsettled problems and some of the old stores did not (yet) find a buyer. To add here the Auchan's ascension, plus the rumours about a possible Carrefour exit but also the surprise visit paid by CEO ‘s George Plassat. To complete the receipt, we shall add a small detail: Pierre Bouchut, Executive Vice President and Financial Director of Delhaize Group. Appointed for the job in March 2012, Pierre Bouchut worked for 15 years, between 1990 and 2005, for the Casino Group, as  Financial Director and then as Chief Administrator. Afterwards, between 2011 and 2012 he was Carrefour  Executive Director for foreign markets. There are no coincidences in retail business. We have nothing else to do but wait, because, as it started, 2013 is able to offer us enough number of surprises.

Florin Frasineanu




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