Positive margins for only half of the brands due to inflation. Profits: Eurospin beats Esselunga
Only half of the Italian large-scale retail chains managed to close 2022 with margins in a positive area while sales see +6.7% as a direct consequence of inflation. This is what the new edition of the Observatory on Italian and international food-predominant large-scale retail trade reveals, which aggregates the economic and financial data of 130 national companies and 31 major international players for the period 2017-2021, compiled by the Mediobanca Research Area. On the other hand, for the Italian large-scale distribution, sales growth of 6.7% in 2022 is expected with the Ebit margin falling to 1.4% from 2.4% in 2021. Inflation threatens the stability of demand, which is declining by 6% in January 2023, eroding the purchasing power of consumers despite the fact that a further increase in sales of 2.8% is forecast for 2023. The search for greater savings opportunities by consumers drives, in particular, private label products (MDDs) which in 2022 reach sales of €12.8 billion (+9.4% on 2021) and the discounters projected over 22% of the market (17.4% in 2017). Promotional pressure is decreasing, from 28.3% in 2019 to 22.4% in September 2022 as the first defense barrier of the large-scale distribution against uncertainty about costs and supply problems. The growth of the online channel continues (+10.5% on 2021) but still stands at around 3% of total turnover. The concentration of the Italian market is stable: the market share of the top five retailers is equal to 57.1%, remaining above that of Spain (49.8%), but far from the Netherlands (80.1%) France (78.4%), Great Britain (75.4%) and Germany (75%). Strong dynamism in organized distribution: the relative weight went from 33.3% in 2017 to 37.9% in 2021. In the period 2018-2021, 14 independent operators entered the perimeter of organized distribution, another 5 moved to inside the segment. VéGé is the operator that has attracted the highest number of new associates (9), D.IT has associated 3 companies, two new entries for Selex and Crai and one each for C3, Agorà and Despar.
The champions of the Italian large-scale distribution
The Mediobanca survey analyzes the performance of the various brands. MD is the sales growth champion between 2017 and 2021: +9.7% on average per year, followed by Lidl Italia (+8%) and Agorà (+7.6%). Followed by the discounter Eurospin (+6.9%), Conad (+6.7%) and Selex (+5.2%). In the last year, Agorà and Eurospin achieved the best performances (+7.7% in both cases), ahead of Lidl Italia (+6.7%) and Finiper-Canova (Iper-Unes) (+6.6 %). Close to the top positions we find Md up 5.6% and Conad (+5.5%). In terms of return on invested capital (Roi), Eurospin excels with 18.2%, followed by MD (15.1%) and Lidl (11.3%). Eurospin claims to be the queen of cumulative profits between 2017 and 2021: 1,286 million, surpassing Esselunga (1,195 million). A short distance away are VéGé at 1,078 million and Selex (1,056 million). Carrefour has accumulated losses of 766 million, Coop for 410 million and Penny Market for 43 million. Coop Alleanza 3.0 is the largest Italian cooperative with sales in 2021 of 4,301 million, followed by Pac 2000 A (Conad Group) at 3,921 million and Conad Nord Ovest at 2,671 million, preceding Unicoop Firenze at 2,349 million. The shareholder loan of the Coop system marks a further decrease from 9.1 billion in 2017 to 8 billion in 2021. In the last 5 years, Coops have achieved net financial income of 826 million and suffered financial write-downs of 850 million.