Denmark Market Overview

Denmark Market Overview
General Facts
– Area: 43,090 sq. km
–
–Capital City: Copenhagen
– National Currency:
Danish Krone (DEK)
– Population (2007):
5.45 million
Density 126.48
people/km
– Head of the State:
Queen Margrethe II
– Prime Minister:
Anders Fogh Pasmussen
Source: CIA
– Ruling Party:
The Venstre Party (Liberal)
The New Denmark
Denmark is split into five regions:
1.
Nordjylland
2.
Midtjylland
3.
Syddanmark
4.
Hovedstaden
5.
Sjælland
The regions were created on 1 January
2007 as part of a reform to replace the
country’s 13 traditional counties.
Additionally, smaller Danish municipalities
(kommuner) were merged into larger units
reducing the number from 240 to 98.
Population Split By Region (2006)
Region
Capital
Population
Area
(Sq. km)
Population Density
(people per sq. km)
Copenhagen
1,633,565
2,561
637
Vlborg
1,219,741
13,053
93
Syddanmark
(South Denmark)
Vejle
1,185,840
12,191
97
Sjælland
(Zealand)
Sorø
811,511
7,273
112
Alborg
57,802
8,020
7
Hovedstaden
(Capital Region)
Midtjylland
(Mid Jutland)
Nordjylland
(North Jutland)
Source: Denmark Statistik, 2006
The 10 Largest Cities In Denmark
Capital
Population
Copenhagen
1,084,885
Århus
228,674
Odense
152,060
Aalborg
121,540
Esbjerg
71,886
Randers
55,909
Kolding
55,045
Horsens
50,983
Vejle
49,928
Roskilde
45,807
Source: Denmark Statistik, 2006
85% of the Danish
population is urbanised.
Approximately a third of
the population live in
Copenhagen.
Copenhagen has a
population more than four
times larger than Århus,
the second largest city in
Denmark.
Political Outlook
Prime Minister Anders Fogh Rasmussen was elected in February 2005.
He is the leader of the Venstre (Liberal) party, and the first Danish Liberal leader to win a
second consecutive term in office.
The government has made concessions to the populist Danish People’s Party (DF) to
pass its legislative programme and will have to continue to pay attention to the DF’s
views, particularly on immigration.
Strong budget surpluses will allow the government to maintain a moderately expansionary
fiscal policy in 2007-08.
On April 1st 2007, there was a reform of corporate taxation, with a reduction in the rate of
tax from 28% to 22%.
Integrating the immigrant population will remain a focus for Anders Fogh Rasmussen.
Danish Politics
• Head of state - Queen Margrethe II
• Denmark voted to stay outside the Eurozone
• Government
– Coalition between the conservative party the Venstre and
the Danish People’s party
– Prime Minister - Mr Anders Rasmussen
Denmark in Figures
• Unemployment 5.8%
• Population Density Denmark 124/Sq.Km
– Versus Ireland 53/SqKm
• % private consumption spent on food, beverages 17.3%
• Main trading partners
–
–
–
–
–
•
Germany
Sweden
UK
France
Norway
Vat rates
– Services 25%
– Food
25%
– Alcohol 25%
Irish Food & Drink Exports
2007
Meat
€30.6 million
Beverages
€7.2 million
Dairy
€9.3 million
Seafood
€12.1 million
Other foods
€9.4 million
Total Irish Food & Drink Exports
€68.6 million
Irish Export Performance 2007
• In 2007 total Irish exports of food and drink increased
10%
• Meat exports increased 17% to over €30m
– Beef €17.3m
– Pigmeat €8.5m
• There was a 52% increase in fish exports to €12m
• Dairy products – predominantly cheese and butter
increased to €9.4m
• Alcoholic beverages – mainly non-whiskey spirits,
declined by 11% to €7.2m
Danish Meat Imports
• Although Self Sufficiency is 94% for beef, imports are
substantial at over 100,000t pa
• Predominantly female (cow hinds) and young beef
• Lamb imports are 7,000t
• Import suppliers of beef are :
–
–
–
–
–
Germany and Holland 70% of total
Ireland 7-8% share
Brazil, Argentina, Uruguay
Poland
Australia
Meat Imports to the Foodservice &
Manufacturing Sectors
• Brazilian beef is returning to hotels and restaurants
• NZ dominates for frozen lamb
• Institutional or cost sector buy full range of meats
from local Danish companies
• Leading companies are Emborg, Dagrofa Catering
Engros, Caterfood, Tulip Catering, Caterfood
• Manufacturing meat is generally imported at lowest
cost
The Retail Market
The Danish Retail Market
• Highly concentrated like Sweden
– Dansk Supermarket, Coop and Dagrofa are market leaders
• Food retail accounts for an estimated €16.8 billion.
• No. of traditional independent stores has halved since 1995
• Centralised purchasing/independent decision making
• Growth in convenience & forecourt retailing
Key Retail Players
• Danske Supermarket
– Regarded as the most progressive retailer / Netto, Fotex
chains
– Prestigious and expanding its market share at pace
• Co-op
– The second largest retail group - Irma, Kvickly stores
• Supergros
– Is privately owned and has undergone rapid transformation
across its retail, wholesale distribution & foodservice
divisions
– Superbest chain is now 220 stores
Retail Market – Structure By Format
Convenience
Hard & Soft Discount
Superstore/Supermarket
Hypermarket
3,500
100
3,000
98
99
1,089
100
Store Numbers
2,500
1,075
1,070
1,096
1,500
1,000
1,093
98
997
2,000
100
869
1,024
1,088
712
704
2004
2005
1,168
1,215
959
992
2006
2007e
954
500
517
539
2002
2003
0
Source: IGD Datacentre
www.igd.com/analysis/datacentre
The Grocery Retail Market –
Structure By Format
The Danish grocery market is dominated by supermarkets and hard/soft
discounters.
Denmark has one of the largest portfolio of discount operators in Europe, and
continues to grow at a rate that is faster than any other sector in the market. This
has been led by market leader Netto.
Between 2002 and 2006, IGD estimates a 34% increase in the number of hard/soft
discount stores operating in Denmark.
Expansion of the hypermarket sector has been fairly static in recent years, as
retailers move back into the city centre.
The number of convenience/forecourt stores amongst the major grocery retailers
increased dramatically in 2006 following Reitangruppen’s acquisition of the Hydro
Texaco chain in Denmark.
Top Danish Retailers 2006
Retailer
Total
Sales
(€m)
Grocery
Sales
(€m)
Grocery Retail
Market Share
(%)
No. of
Stores
Sales Area
(sqm)
Dansk Supermarked
5,185
4,770
29.85%
467
570,100
Coop Danmark
4,579
3,942
24.67%
1,157
1,261,450
Reitangruppen
917
917
5.74%
466
183,800
Spar Danmark
864
864
5.41%
485
141,710
Aldi
520
520
3.25%
242
169,400
3,326
388
2.43%
43
83,600
Edeka Danmark
289
289
1.81%
347
177,343
Metro Group
235
235
1.47%
4
31,000
Lidl & Schwarz
120
120
0.75%
45
67,500
Dagrofa
Source: IGD Datacentre, 2006 estimates
Note: Data is for grocery formats only except Total Sales which includes non-grocery if
applicable. Total Sales & Grocery Sales are Net. Data includes franchised operations where
appropriate.
Banner
Total Sales
(€m)
Format
No. of
Stores
Sales Area
(sqm)
Av. Sales
Area (sqm)
Bilka
1,600
H
14
175,000
12,500
Føtex
1,825
S/S
78
210,600
2,700
Netto
1,310
H/SD
360
180,000
500
35
C/F
15
4,500
300
Døgn Netto
Key:
H = Hypermarket
S/S = Superstore/Supermarket
H/SD = Hard/Soft Discount
•
Dansk Supermarked is jointly-owned by A.P. Møller (Maersk Group) and F. Salling A/S.
Source: IGD Datacentre, 2006 estimates. Data is for grocery formats only. Total sales are Net.
www.igd.com/analysis/datacentre
Bilka in Hundige and
Netto in Frederiksundsvej
•
Dansk has successfully overtaken Coop Danmark as
the No.1 grocery retailer in Denmark, with the Netto
chain of discount stores acting as a 'growth engine' for
the group.
•
Denmark remains Dansk's only operating market in
which it offers more than a discount format.
•
It operates the Bilka chain of hypermarkets, Føtex
supermarkets, Netto discounters as well as A-Z
department stores and Tøj and Sko footwear.
•
Dansk has launched Døgn Netto format which are
smaller than typical Netto stores, discount /
convenience hybrid, with stores open til 10 p.m.
Source: Retail Analysis photo gallery
Banner
Total Sales
(€m)
Format
No. of
Stores
Sales Area
(sqm)
Av. Sales
Area (sqm)
Kvickly Xtra
231
H
14
126,000
9,000
Kvickly
867
H
68
238,000
3,500
1,068
S/S
266
372,400
1,400
Irma
269
S/S
74
81,400
1,100
Dagli Brugsen
532
S/S
346
173,000
500
Lokal Brugsen
56
S/S
48
15,900
331
Coop Brugsen
6.44
S/S
4
2,000
500
Fakta
912
H/SD
337
252,750
750
Super Brugsen
Key:
H = Hypermarket
S/S = Superstore/Supermarket
C/F = Convenience/Forecourt
H/SD = Hard/Soft Discount
Source: IGD Datacentre, 2006 estimates. Data is for grocery formats only. Total sales are Net.
•
.
www.igd.com/analysis/datacentre
Fakta and Irma City on
Vesterbrogade, Copenhagen
•
Coop Danmark operates a multi format portfolio of
stores, including convenience, discount,
supermarket and hypermarket stores.
•
Coop Danmark's Fakta discount chain is well
placed to capitalise on the growing pressure on
price and expansion of the discount sector.
•
Irma stores have adopted a different pricing and
merchandising strategy compared to the large
European mainstream discounters in Denmark,
offering more upscale locally sourced products.
•
Coop Danmark plans to open an additional 70
Fakta stores in Denmark by the end of 2008.
Source: Retail Analysis photo gallery
Banner
Total Sales
(€m)
Format
No. of
Stores
Sales Area
(sqm)
Av. Sales
Area (sqm)
Rema 1000
744
H/SD
156
124,800
800
7 Eleven
68
C/F
60
9,000
150
YX
104
C/F
250
50,000
200
Key:
C/F = Convenience /Forecourt
H/SD = Hard/Soft Discount
Entered the Danish market in 1993.
Sales in Denmark accounted for approximately 22% of group sales in 2006.
Reitangruppen holds the 7 Eleven franchise license in Denmark.
Source: IGD Datacentre, 2006 estimates. Data is for grocery formats only. Total Sales are Net.
www.igd.com/analysis/datacentre
7 Eleven and Rema 1000
in Copenhagen
Rema 1000 accounted for over 80% of Reitan's total
turnover in Denmark in 2006.
In July 2006, Reitan acquired the Hydro Texaco chain of
forecourt stores in Denmark. The stores were
consolidated into Reitan's accounts in the beginning of
the third quarter 2006.
Reitangruppen is set to invest €50 million on refurbishing
the forecourt stores into the YX banner in the years
ahead.
Reitangruppen has teamed up with airline SAS to sell
flights and package holidays in its stores across
Scandinavia. The new service, which is named "Go“,
has been integrated into 7 Eleven stores, Rema 1000
stores and YX forecourt sites.
Source: Retail Analysis photo gallery
Banner
Total Sales
(€m)
Format
No. of
Stores
Sales Area
(sqm)
Av. Sales
Area (sqm)
864
C/F
485
141,710
292
Spar
Key:
C/F = Convenience/Forecourt
Spar Danmark A/S is part of Dagrofa.
Source: IGD Datacentre, 2006 estimates. Data is for grocery formats only. Total Sales are Net.
www.igd.com/analysis/datacentre
Denmark is the second largest market in Scandinavia for
Spar, behind Norway.
Spar in Denmark
The Glostrup store in Copenhagen was jointly developed as a
new concept store with Spar International. The convenience
store focuses specifically on Food to Go and convenience
products.
Although there has been a decline in store numbers in recent
years, total retailer sales area has increased, with average
store size increasing by 10%.
Spar Danmark has focussed on better serving its younger
customers through branding activities and developing strong
links with the local community.
Source: Retail Analysis photo gallery
Banner
Total Sales
(€m)
Format
No. of
Stores
Sales Area
(sqm)
Av. Sales
Area (sqm)
520
H/SD
242
169,400
700
Aldi
Key:
H/SD = Hard/Soft Discount
Aldi Nord entered Denmark in 1977, with its entry prompting the domestic operators to
launch their own competing discount formats.
Sales in Denmark accounted for approximately 1.3% of total group turnover in 2006.
Source: IGD Datacentre, 2006 estimates. Data is for grocery formats only. Total Sales are Net.
www.igd.com/analysis/datacentre
Denmark is Aldi’s only market in Scandinavia.
Compared to other European countries, Aldi’s new
store development programme in Denmark has
been fairly static.
Aldi’s Danish business is managed through two
regional divisions, at Kolding (West Division) and
Karlslunde (East Division).
Aldi in Denmark
Banner
Total
Sales
(€m)
Format
No. of
Stores
Sales Area
(sqm)
Av. Sales
Area (sqm)
ISO
160
S/S
12
27,000
2,250
Dreisler
128
S/S
9
12,600
1,400
SuperBest
99
S/S
22
44,000
2,000
Key:
S/S = Superstore/Supermarket
Dagrofa A/S is a private holding company owned by tobacco company Skandinavisk
Tobakskompagni A/S, Aps KFI-Figros, and A/S KFI-Detail.
Source: IGD Datacentre, 2006 estimates. Data is for grocery formats only. Total Sales are Net.
www.igd.com/analysis/datacentre
Banner
Total Sales
(€m)
Format
No. of Stores
Sales Area
(sqm)
Av. Sales Area
(sqm)
Merko
81
S/S
97
38,800
400
Activ Super
73
S/S
126
100,800
800
Focus Focus
43
C/F
78
11,700
150
Complet
12
C/F
36
5,400
150
Coma
5
H/SD
10
3,500
350
Key:
S/S = Supermarket/Superstore
C/F = Convenience/Forecourt
H/SD = Hard/Soft Discount
Note: Excludes Rema 1000 stores
Edeka entered the Danish market in 1990.
Source: IGD Datacentre, 2006 estimates. Data is for grocery formats only. Total Sales are Net.
www.igd.com/analysis/datacentre
Outlook
• Continued growth of soft & hard discounter
• Growth in Private label
• Retailers willing to look at niche opportunities to
differentiate
• Opportunities in private label (premium & speciality)
Market Characteristics
• The supermarket is the principal store format in the
Danish market
• Centralised purchasing but independent purchasing
decision making
• Excellent logistics, RDC’s
• Private label low, but growing
• Growth in convenience & forecourt retailing
Attractions of Exporting to
Denmark
•
•
•
•
•
•
•
Growing economy
Affluent consumer
English widely spoken
Ireland’s image
Good logistics
Concentrated retail market
Good niche opportunities
Bord Bia Services
• Market Information & Trade Contacts
• Research tailored to company requirements
• Mentoring Service to enter and grow the market
• Contact Bord Bia Head Office:
– Frank.murray@bordbia.ie
– Mobile +353 87 7680567