Specialty Retailers Leading the Way
In French Frozen Food Market Gains
By MARY DAVIS, QFFI Correspondent

Price comparisons among consumers are encouraged at this Carrefour retail store in Claye Souilly, which is loaded with discounted items offered in the freezer case with yellow and red signage seen at left.

Sales growth relatively strong, despite mediocre merchandising campaigns and lack of enthusiasm for the category seen in some supermarket outlets. Future looks promising.

Frozen food marketers had a banner year in France during 2006 – the last year for which figures have been analyzed in great detail – as they enjoyed one of the strongest increases in sales in the national food sector. Production of frozens other than ice cream reached 2,129,000 tons, up 2.5% over the previous year; and turnover was 7.57 billion euros, a 3.8% increase. For ice cream, consumption reached 372.3 million liters, up 2.4%; and turnover hit 1.706 billion euros, up 1.2%.

The largest sales gains for frozens were in the specialist chains (freezer centers and home delivery services), up as much as 10%. In the hypermarkets and supermarkets, the increase was only one percent. Discount stores saw a two percent drop in sales.

Apart from the specialty outlets, sales of frozens paralleled that of food categories in general. Hypermarkets did well in 2006, as volume was up 4.4% during the first 11 months of the year. Sales in supermarkets were down 0.2%, while hard discounters lost 2.1%.

As a general rule, specialty stores apart, the larger the store the better it did. A basic reason for this tendency is the modification of the terms of the Loi Galland regulation, which prevented resale of products at a loss. A new law, the Loi Dutreil, which is complex, bodes well for the large stores.

Because of greater buying power, they are better able than the small stores to take advantage of the modification. In the future, however, hypermarkets will face a problem. Consumers, on the whole, feel pressed for time; and shoppers cannot get into and out of hypermarkets quickly. Thus the major chains are investing in various lines of neighborhood stores.

Shopping for ice cream products is made easy in the well-stocked freezer cabinets and reach-in display cases at Carrefour stores in France.

Supermarket chains, doing less well in general than the hypermarkets, are wavering. Some are enlarging to become small hypermarkets; some are adopting a soft discount policy. As for the discount stores, which have suffered the greatest loss, some are varying their offering, for example to include more fresh products to appeal to consumers.

The chief executive officer of Ed was quoted in LSA a while back as stating that the discount chain made a good choice in emphasizing “produits frais,” translated as “fresh products” – but what he meant by that was not altogether clear.

The word “frais” can obviously mean “fresh” in the sense of just harvested or produced; but the speaker was referring to a category of food. Thus the word can mean unprocessed food, sold as it came from the farm or fishing trawler. It can also mean what English speakers call “chilled” food – especially packaged food, often cooked dishes based on components that were previously frozen. Such products are distributed refrigerated at above-freezing temperatures, and thus have a relatively short shelf life. The term is now sometimes also used as a general category, which includes food straight from the farm, chilled food, and frozen food.

Sales of frozens in hypermarkets and supermarkets are growing much more slowly than those through specialty outlets. However, the large stores accounted in 2006 for 46.5% of all frozen food sales in France. Thus improvements in marketing of frozens have the potential for greatly increasing overall turnover. Also, given the large number of chains of neighborhood stores, improvements in the small stores could also have an appreciable effect.

There is evidence that retail outlets that do not specialize in frozen foods are paying more attention to them now than was the case in recent years. At one time many stores gave the impression that managers thought that frozens would be superseded by chilled, prepared foods. Now the newer stores, at least, show that management knows that frozens are here to stay and are worthy of careful, if not creative, marketing. A disproportionate share of attention may go to promoting private label frozens as opposed to brand name frozens in general, both in the stores and in out-of-store advertising.

The shelves are stocked from top to bottom with a variety of different branded and private label frozen food products at this Auchan outlet in Caluire.

Quick Frozen Foods International (QFFI), having visited a cross section of hypermarkets, supermarkets, and discount stores in Paris and its suburbs, found signs that some retailers are making serious efforts to improve their presentation of frozens. Nevertheless, there are still grounds for the oft-heard complaints of poor signage, insufficient space, and limited offerings.

Of the chains inspected, Carrefour appeared to have made the greatest improvement in directional signage. At one of its outlets inside a mall at Claye Souilly (near the French Disney World), the area housing frozen foods was clearly indicated by large hanging circular blue and white signs that pictured a penguin in the snow, circled by the twice printed word “surgelés” (frozen food).

The entire front of the store was open to the hall of the shopping center, and the frozen food section was directly behind several cash registers. The sign was thus visible from the hall before one entered the premises.

Frozen food display cases made up a cohesive unit, totaling some 130 paces in length: two long sets of cabinets and reach-in cases facing each other and between them a line of cabinets. As seems usual for fairly new equipment in the “grande distribution,” the cabinets had doors but the cases were uncovered. The separate cases and the cabinet/case merchandising units each had two sides for display of products. Both sides of the central cases were filled with frozens, but the back sides of the cabinets/cases were used for non-frozen products.

Above the cabinets, facing the frozens side, were large, attractive signs in soft colors, each depicting a type of frozen food. On the left of each sign was a picture; and, on the right, a background of orange on which was printed the name of the product type and the Carrefour logo.

For desserts, the various signs indicated “batonnet” (stick), cone, “glace enfant” (ice cream for children), pâtisserie, “bac et pot” (case and cup). Hanging down the side of the cabinets and perpendicular to them were color-coded banners with the name of the type of product and, above it, the circular logo of the penguin in snow. The banners for ice cream were red.

Shoppers check out the 100% fresh-frozen hamburger and pizza products at this Géant Casino store in the thirteenth arrondissement of Paris.

Large cards conveying advice in blue letters on an orange background were scattered through the store. On a pillar in the frozen food section was a card stating: “Advice – The Benefits of Freezing. Freezing is an excellent conservation procedure, which allows the preservation of the nutritional qualities of food (vitamins).”

Carrefour was the only store in which this reporter happened to see comments posted about the nutritional value of frozens in particular.

Another card on a pillar proclaimed: “Freshness guarantee – for each purchase of a frozen product, an insulated bag is given to you.”

The bags, hanging near it, bore a penguin logo, plus advice on the length of time that they would preserve food and a note on the retailer’s environmental friendliness reading: “Made of four layers of polyethelyne, a neutral material that degrades without contaminating underground water, and does not release pollutants or toxic gases if incinerated.”

The name Carrefour and the logo for the chain were inconspicuous. In this case, Carrefour is advertising its frozen food rather than using the space on the bag to promote the name of the chain in general.
The Claye Souilly Carrefour describes itself on the Internet as in the process of becoming a citizens’ store, illustrating sustainable development by reconciling economic growth with respect for people and nature. An example of this policy in regard to frozens is that the unit has a quality control director, whose duties include seeing to it that the store respects the cold chain.

Furthermore, the windows of its “produits frais” are no longer refrigerated with freon, which damages the ozone layer, but with diphase carbon dioxide. The liquid gas is distributed by a pump system.

Not only are there plenty of frozen food products to choose from at this Casino supermarket in Villeurbaine (outside of Lyon), but shoppers may avail themselves to free insulated bags (seen hanging on the post) to keep their purchases cool while being transported home.

In the area marked “produits frais” on the map of the store, Carrefour tries to create the atmosphere of an outdoor market. Employees prepare before the eyes of customers a variety of products including ice cream.

The hypermarkets and supermarkets are waging a continuous price war. In particular, Carrefour has been sparring with Leclerc, although no mention of Leclerc by name was seen at the Carrefour store.
This reporter toured a Leclerc hypermarket in Achères to the west of Paris. The outlet, which opened in September of 2006, is the anchor of the Le Grand Cèdre shopping center. Specific departments were easy to locate within the store, because for each, a sign jutted out overhead into the central aisle.

Compared to the new Carrefour unit, there seemed to be fewer signs referring to low prices, and the store had a less cluttered look.

The frozens were in the back half of the shop, at the far left, shelved in a double row of cabinet/cases similar to those at Carrefour, with one side used for frozen foods.

There were no signs for types of frozen products above or on the cabinets themselves, but a rather neat innovation below the cabinets and above the cases was several lines of blue bars to which price tags were affixed.

Matching prices and products is a perennial problem in French stores, because the prices are usually on the sides of the cases rather than on the products themselves and, when items get moved around or the supply of an item is exhausted, one may search in vain for a listed item. This writer has even had the experience of being unable to find prices for at-hand products in Picard freezer centers. But, at least there, they are listed in a catalog that a customer can carry around.

The labels in Leclerc won’t completely prevent items from being misplaced – wire dividers stretching from front to back of the cases will help with that – but they are much neater than the sometimes hand-written and haphazardly affixed labels in many stores.

At the end of one row of cabinets was a case containing promotional items. At the other end, that on the central aisle of the store, was a case clearly labeled: “New items in your frozen food line.”

The display was an innovation for a hypermarket. While cases with new items are routinely present in freezer centers, this was the first time that this writer had seen one at a hypermarket. It was very neatly arranged, with 10 lines of boxes, one line for each item, stretching from front to back of the case. Brand name items as well as private label products were included.

Despite the emphasis on prices in the hypermarkets, “premier prix” (lowest priced) items are less conspicuous now than they were five years ago. The large stores seem to be more interested in presenting a good quality-price ratio in the private label products on which they print their names, than in producing and selling cut-rate items.

However, Leclerc did offer a few “lowest price” ice creams of its own, Eco+ items, the presence of which was indicated in each instance by a blue and yellow card bearing the label and placed perpendicular to the case. The packaging was a simple design, also in blue and yellow, emphasizing the word Eco+.

In its handling of frozens, the Leclerc store in Achères was well ahead of a Leclerc supermarket on the outskirts of Lyon where this reporter frequently shops. Even taking into consideration the difference between a hypermarket and a supermarket, the signage, orderliness and variety of products were all improvements over past presentations.

A Carrefour hypermarket at the Par Dieu in Lyon featured signs with pictures displaying food types above the cabinets, as well as greatly expanded space available for frozens. The packages themselves seemed in better shape overall than they were in the past at this store. Clearly management has made a serious attempt to upgrade the frozen food department, which in total length of all the cabinets, about 135 paces, provides even more space for frozens than does the department at Claye Souilly.

On QFFI’s visit to an Auchan hypermarket in Caluire (not far from the Par Dieu Carrefour), green cards printed with white letters giving advice on cooking and nutrition were found attached to the display cases.

Auchan has a number of frozen items in a gourmet line called Mmm! Among them is 2 tartares de St. Jacques aux tomates confits et au chèvre frais (two tartars of scallops with tomato conserves and fresh goat cheese). Tartars consist of ground meat or seafood prepared to be eaten raw, and the directions on the box stated that the contents needed only to be thawed.

The frozen food section at the Auchan was in the front half of the store, directly behind a number of check-out lines, as at the Claye Souilly Carrefour. One feature noticed for the first time at Auchan was what Auchan calls a “Self Discount” section just beyond the entrance at the left end of the store.
“Save money without measure,” an orange and black sign bearing the name of the section proclaimed. The area was small, but it included a reach-in case of frozen foods, above which canned foods were shelved. None of the products on display were Auchan brands or advertised national brands.

A Géant Casino near the Porte d’Italie in the thirteenth arrondissement of Paris allots a large space for frozens. The merchandising equipment stretched for 168 paces, including a few bins and three rows, one double-sided, of cabinets/cases, all in a front corner of the store. In some places, however, what seemed like an excessive number of packages of the same item appeared. For example, from place to place, all four shelves of a cabinet might display packages of the same product, one above the other.

There seemed to be fewer examples of repetitious presentations at the hypermarket than in past years, and the outlet has added large attractive signs above its frozen food cabinets. On a dark green background appear in large letters the words: “100% Frais Surgelés” (100% fresh-frozen).

An old Casino supermarket in Villeurbanne bore little resemblance to the Géant. The shelves were not as well kept, and the store made little attempt to appear upscale. Insulated paper bags for frozen products hung at the end of the line of refrigerated cabinets. They bore the name “Casino” in large letters, and a sub-text noted that they were free with purchases of frozen foods.

Monoprix, a center-city general store chain, illustrates a shift towards greater attention to frozen foods. QFFI visited three Monoprix outlets in the Paris area – one full-fledged Monoprix and two Monop convenience stores. At the Monoprix, which was in Montreuil, frozen foods were displayed in the now familiar cabinet/case format, but on the glass cabinet doors product names were written in block capitals in white, bordered in blue. This common sense approach to signage was not seen in any other chain. A broad blue-green stripe along the top and bottom of the facing lines of equipment helped to unify the area.

The selection, a judicious mix of private label and name brands, was well organized. The same cannot be said of the first Monop, a convenience-type store tucked away in the Gare du Nord (Train Station for the North). A few basic frozen items were displayed in a couple of cases with cabinets above them in a dark, back corner of the shop, which had no signs to suggest where they were. Chilled items seemed to have invaded the store, as 10 times more feet of shelving were devoted to chilled than to frozen foods.

A newer Monop on the corner of the Rue de Rennes and Blvd. St. Germaine gave more appropriate space to frozens and used the same good-looking equipment with names as the Monoprix in Montreuil. A larger than usual number of wire dividers – arranged a package-width apart – helped keep the products in the cases in order.

The Intermarché in which this reporter shopped was in Paris’ twelfth arrondissement, near the Gare de Lyon. It appeared to be notable only for its low prices. The layout was obviously a case of making the best of the available real estate. The unit had only short frontage on the street, giving it the appearance of a convenience-type store. Nevertheless, after walking through the door and past the bakery and patisserie products on either side of a relatively narrow room, one entered an expanded space that eventually turned a corner to form an “L.” The frozen food equipment was along the back of the second leg of the “L,” and, like the store as a whole, had a large number of items crammed into what remained a relatively small and dark space.

The Mousquétaires have produced a new concept for Intermarché stores, Mag3, i.e. third generation store. Almost 40% of the chain’s 1,474 outlets will embody the new concept by mid-2008.

The Intermarché at Saint-Afrique was among the first Intermarchés to adopt all aspects of the concept. According to the company’s website, changes include “a new universe of frozen food in which the choices have simply doubled!”