Annual Report
2015
Annual Report
2015
Contents
5 Letter to shareholders
Claudio Alibrandi
7 Introduction
Francesco Pugliese
9
17
17
17
34
Identity
About us
Governance of the Consortium
Member cooperatives
Multi-channel distribution
37 Market
38 The scenario
50 Market results
61
62
72
76
81
85
86
95
For people and the community
Conad and household savings
Conad and its relationship with the customer
Conad and the quality of its products
Conad with regional businesses
Conad for development and employment
Conad and the community
Conad and the environment
101 Forecasts for 2016
Letter to shareholders
Claudio Alibrandi
Conad President
Conad is one of three modern distribution businesses which generated growth
in 2015 not just in terms of turnover and market share. The recognition and trust
also grew which eight million families place in us every week. When customers
shop at a Conad store, it confirms we have made the right choices; they are
satisfied customers who know they can also rely on the expertise and assistance
of the shareholder and their staff.
The challenge of the future must therefore start off from the store and the
business nous of our shareholders. They are the link with the people and their
needs, concerns and daily life, including local foods and traditions. We have a
family bond with the customer, particularly in smaller residential areas, villages
and hamlets; this relationship creates value to be given back to the region and
its community, while also helping us grow from a business point of view. All our
shareholders have an important place within the community where they work
because they are the direct link through which Conad speaks to the customer.
It is important that shareholders really understand the region, city and district
where they work and run their store and enhance everything linked to the
region, finding the necessary ways to understand the region, fulfil its potential
and help its development. This gives rise to a renewed focus on the role of
the neighbourhood, which is a distinctive hallmark of Conad. Conad and the
communities where it works therefore have an inseparable bond.
We have many entrepreneurs who join our world and open up new stores. We
train them and bring their direct management experience to life, often alongside a
shareholder with more experience to teach them about the Conad philosophy.
It is important to create attractive, modern stores, but it is even more essential to
ensure that customers feel comfortable in these facilities. Our strengths include
an expertise in selling the freshest produce, supporting many outstanding small
and medium-sized local producers and dealing with the customer. Yet we still
innovate, we keep challenging ourselves and discovering new things compared
to what we currently have in the world of services, methods and products. We
help the customer understand what we have and value: ethics is the driving force
behind innovation, a desire to serve the customer, always offering something
great.
Detecting or anticipating new consumer models means providing solutions
for daily shopping. It means specialising in various formats to encourage the
distinctiveness of brands and working in such a way that customers always have
a Conad close to home which meets their needs, perfectly satisfying their buying
habits and helping them see that our brand products are a valid alternative to
industry brands and a good way of saving, offering great value for money. It
means building a strong bond with the brand so they are satisfied and content.
This is a major asset which we cannot lose or just be content consolidating. This
is the challenge we must lay down for the future and for our shareholders so
that everyone believes in a strong, prosperous brand product with ever growing
appeal for the customer.
5
Introduction
Francesco Pugliese
Conad CEO and
General Manager
Kick-starting the economy and employment, stimulating demand, encouraging
consumerism, increasing demand for consumer goods, producing a reaction in
supply: little – or none – of all this happened in 2015. This was down to fears over
tomorrow and spending money, because the future is uncertain.
We have chosen the community as the main theme of this Annual Report.
Communities of people, in both villages and cities, which in turn are communities
of customers, of Conad and of the whole of Italy. They are linked to a deep
sense of identity which stimulates certain reflections on a country which needs
development more than it does growth, as well as structural reforms that can pull
it out of a stagnant mire, fill young people with aspirations again, open the doors
to progress and return to the innovative talent of the Italian economy.
Italy lives in regulations and amendments; more red tape will mean more
corruption, not sure-fire greater efficiency. Rigid bureaucratic systems are
a critical problem that suffocatingly permeate into the daily lives of many
businesses, producing excess where criminal kickbacks thrive.
Liberalisation did not even take off. It is the fault of lobbyists and potentates who
do not allow the government and Parliament to legislate to guarantee citizens
benefits that would cost the State nothing, ignoring the economic difficulties of a
growing number of families and maintaining some of the highest sales margins in
Europe, as in the case of medicines.
We need to modernise communities, to meet their needs and to be by their side
along the path towards the smart cities of the future, where services and facilities
will interact with the human and social capital of those living there. We must
also remember how to cooperate and how to be together, recovering a practised
rather than a past solidarity.
There is a desire to build and to be communities. In response, the world of
manufacturing and retail can only answer just as enthusiastically in questioning
itself and showing a spirit of innovation.
Conad’s consumer commitment is about meeting people’s needs, which is
encapsulated by our slogan and the view we have of the world. It is a strong
commitment to human and economic resources to create development – for our
entrepreneur shareholders, communities, local producers and the country itself
– and which takes place through communities of people. The results we have
achieved so far give us confidence.
We have undertaken a great journey and have grasped the feelings of the general
public: there is a need to socialise and interact and for understanding, not just
from a “local” point of view, as well as a sense of emptiness which, beyond social
model templates, becomes the model for a crisis that is certainly economic but
also increasingly social.
We need to overcome our cultural bias linked to old canons of economic
patriotism, to bring squares and the outskirts to life; we need to stop ghettoising
the elderly and let them live together with the part of the city or village which
produces, lives and sees them as an asset – of memories, traditions, knowledge,
etc – and not a financial burden. Similarly, Italian businesses need to become
competitive again and economic policy-makers need to work to modernise the
country. To be a real community, the country needs all our help.
7
Identity
Annual Report 15 Identity
About us
Conad, Consorzio Nazionale
Dettaglianti (National Retailers
Consortium), is the biggest organisation
in Italy of independent retailers and
a leader in the supermarket channel,
while serving as the second commercial
distribution chain in the country. In
terms of its company structure, it joins
together 8 large regional cooperatives*,
including 2,673 affiliated retailers in
total, creating an original distribution
model founded on the figure of the
trader/cooperative member (or the
trade entrepreneur affiliated under a
cooperative). It is the leading player in a
network that sees the Consortium as a
tool for guidance and the epitome of the
entire system.
From an operational perspective, it is
organised into three levels:
- shareholders who own stores,
cooperative associates;
- cooperatives, which operate in
different areas of the country,
supporting affiliated entrepreneurs
and coordinating the commercial
side of the business at regional level,
with administrative, commercial,
logistical and financial services;
- the national Consortium, which
serves as a purchasing and
services group in charge of
strategic planning, marketing
and communications for the
entire system and the production,
promotion and development of its
own brand products.
International partnerships
The Conad Consortium was one of the
promoters behind the agreement which
led to the formation of AgeCore in
August 2015, a strategic international
alliance that unites any partner
brands of Core and Alidis (Alliance
internationale de distributeurs).
Alongside Conad, the group now
includes the Swiss Coop, the Belgian
Colruyt, the German Edeka, the French
Groupement des Mousquetaires and
the Spanish Eroski.
This agreement has created the largest
alliance in Europe of independent
retailers and market leaders:
23,000 stores spread across the
Old Continent, which generate an
overall turnover of €140 billion. New
potential synergies and growth are
therefore opening up for the Conad
system. This partnership offers many
advantages including, on the one hand,
the possibility of offering customers
better value thanks to a wider, cheaper
range of products, and on the other
hand, the opportunity of opening new
market outlets up to Italian agri-food
production.
Memberships
The Conad Consortium is a member
of two political/trade union
organisations: ANCD, Associazione
Nazionale Cooperative fra Dettaglianti
(the sector branch of Legacoop) and
ADM, Associazione della Distribuzione
Moderna, whose goal is to represent
the sector in dealings with industrial
and agricultural production.
* Now 7 following the merger between two Sicilian cooperatives in Conad Sicily, completed on 1 March 2016.
10
The Conad
Consortium
TURNOVER
NET WORTH
EMPLOYEES
1,197
74.9
185
MILLION EUROS
MILLION EUROS
The Conad
system
11.9%
TOTAL
ITALIAN SHARE
(Source GNLC II Sem 2015)
SALES NETWORK
TURNOVER
AGGREGATE
NET WORTH
BILLION EUROS
BILLION EUROS
12.2
2.1
3,055
STORES
20.1%
TOTAL
SUPERMARKET SHARE
1,918,013
SALES AREA SQM
(Source GNLC II Sem 2015)
2,673
SHAREHOLDERS
48,254
EMPLOYEES
26.4%
OWN BRAND SHARE
IN THE SUPERMARKET
CHANNEL
(Source GNLC II Sem 2015)
11
Annual Report 15 Identity
The central role
of the entrepreneur
shareholder
Entrepreneur shareholders have
several different identities: they are
simultaneously traders, entrepreneurs
and cooperative members and Conad’s
distinctive feature lies in this original
combination. Retailers have always
freely chosen to team up, to form
associations and to grow given that
they understand the central role of
people and their ambitions, as well
as the importance of enhancing their
potential. This has either been to
meet their customers’ needs – by
potentially anticipating their needs
and desires – or to guide, manage
and make their business profitable,
without, however, losing sight of the
legitimate interests of their affiliated
partners. But it has also been to help
the cooperative develop and to share
work programmes and projects with
other shareholders.
The story
Conad’s story is one of a group of small retailers who, between the late
1950s and early 1960s, wanted to cut themselves loose from the powerful
shackles of wholesalers, so they rejected the individualistic nature commonly
attributed to traders and decided to team up to tackle the market together.
The Second World War had ended just over a decade ago and the country
wanted to leave the horrors and hardship behind, looking to grow quickly, to
rebuild and, above all, to build a new world. Retailers, shopkeepers and small
or micro shop owners, but also unemployed farm workers and labourers, all
learned the cooperative trade together. They founded the first cooperative
purchasing groups and then teamed up with other similar projects that were
popping up more or less all over the country. On 13 May 1962, in Bologna,
they signed the articles of association for Conad, the National Retailers
Consortium. And so the brand we all know today was founded which, in fifty
years, has become the second commercial distribution chain in Italy.
It is a complex cooperative system, still supported today by a group – albeit
a much larger one nowadays – of affiliated traders, people who have made a
choice in this matter: to cooperate in order to flourish together, shareholders,
customers and the region.
12
Annual Report 15 Identity
Governance of the Consortium
The Board of Directors
This is formed of the President, the
CEO (and General Manager) and by 12
Directors representing the affiliated
cooperatives. It makes strategic
decisions and steers the business,
overseeing management performance
and the implementation of governance
rules.
The Board of Directors was appointed
on 17 June 2014.
The President
The President summons the BoD, sets
and coordinates the day’s agenda and
supervises activities. Since January
2013, the role has been filled by Claudio
Alibrandi, a Conad shareholder since
1984 and owner of five supermarkets
through his companies, as well as the
President of Pac 2000A.
The CEO and General Manager
The CEO is in charge of identifying
medium and long-term development
policies, while also ensuring that the
activities approved by the Board of
Directors are carried out properly. In
2014, this position was entrusted to
Francesco Pugliese, who has held the
role of General Manager since 2004,
the year when he joined Conad having
run major companies in the food
sector.
The Brand Executive Committee
The Brand Executive Committee is a
corporate body formed of six members
who are chosen from the Directors also
serving
as President of the social cooperative.
They are appointed to grant or
withdraw shareholders’ rights to use
Conad’s brands and store signs.
14
This Committee examines any
authorisation applications for licences
to use Conad brands with candidate
stores and approves any authorisation,
where warranted by the requirements
laid down by the BoD.
The current Brand Executive
Committee was appointed by
resolution of the Board of Directors on
17 June 2014.
The Board of Statutory Auditors
The Board of Statutory Auditors
was appointed by the Shareholders’
Meeting on 17 June 2014 and is
formed of 3 standing auditors and 2
deputy auditors. It is the controlling
body of the companies: it is in charge
of overseeing the Directors’ work
and ensuring that management and
administration comply with legislation
and the articles of association.
The Supervisory Board
This Board was established on 7
October 2014 under Article 6 of
Legislative Decree No. 231/2001, by
appointment of the Board of Directors.
The internal Supervisory Board has
autonomous powers of initiative and
control and is in charge of ensuring
that the organisational model is
properly implemented and respected.
Given the size of its business, Conad
has opted for an auditing body formed
of three members, which shall remain
in office for three years. Each member
may serve up to three terms. The
BoD requires that at least one of the
members is replaced every time a
new board is appointed to comply
with the principles of autonomy and
independence.
Annual Report 15 Identity
Board
of Directors
Brand
Executive Committee
Management
Board
President
Claudio Alibrandi
Claudio Alibrandi
Aldo Pisano
Maurizio Pelliconi
Valter Geri
Marzio Ferrari
Maurizio Pavone
CEO and General Manager
Francesco Pugliese
Vice President
Aldo Pisano
CEO and General Manager
Francesco Pugliese
Directors
Salvatore Abbate
Ugo Baldi
Alessandro Beretta
Antonio Di Ferdinando
Marzio Ferrari
Ivano Ferrarini
Valter Geri
Natale Lia
Luca Panzavolta
Maurizio Pavone
Maurizio Pelliconi
Danilo Toppetti
Supervisory Board
President
Eleonora Ciliberti
Members
Marcello Ferrari
Federico Mazzacuva
Sales Manager
Francesco Avanzini
Customer Marketing
and Communications Manager
Giuseppe Zuliani
Distribution Channel Marketing
Manager
Alberto Moretti
Administration, Finance
and Control Manager
Mauro Bosio
Human Resources Manager
Moreno Batani
As of 30 May 2016.
Board
of Statutory Auditors
President
Giorgio Rusticali
Standing auditors
Adolfo Fantacci
Franco Zazzetta
15
Member cooperatives
Nordiconad
Conad Centro Nord
Piedmont
Aosta Valley
Emilia*
Liguria*
Veneto*
Trentino Alto Adige
(DAO - Dettaglianti
Alimentari
Organizzati)
Lombardy
Emilia*
8
COOPERATIVES**
110
ITALIAN PROVINCES
Commercianti
Indipendenti Associati
Romagna
Friuli Venezia Giulia
Marche*
Veneto*
Republic of San Marino
1,456
ITALIAN
MUNICIPALITIES
Conad Adriatico
Marche*
Abruzzo
Molise
Apulia
Basilicata
Albania
Kosovo
Conad del Tirreno
Tuscany
Sardinia
Liguria*
Lazio*
*
Pac 2000A
Umbria
Campania
Calabria
Lazio*
Sicilconad
Conad Sicilia
Western Sicily
Eastern Sicily
Malta
Present in certain provinces of the region.
** Now 7 following the merger between two Sicilian cooperatives in Conad Sicily, completed on 1 March 2016.
17
Nordiconad
Via Danimarca 50
Modena
SALES
CONSOLIDATED
NETWORK
1,588
242
5
NETWORK TURNOVER
MILLION EUROS
NET WORTH
MILLION EUROS
Present in
Emilia-Romagna (Bologna, Ferrara, Modena)
Liguria (Genoa, Imperia, Savona)
Lombardy (Mantua)
Piedmont (Alessandria, Asti, Biella, Cuneo,
Novara, Turin, Verbania, Vercelli)
Aosta Valley (Aosta)
INVESTMENT
MILLION EUROS
Nordiconad operates in Trentino Alto Adige, in
the provinces of Trento and Bolzano, with the
associate DAO - Organised Food Retailers.
Market share
7.8% in the relevant area
Source: GNLC 2nd half of 2015
557
SHAREHOLDERS
6,636
EMPLOYEES
SALES NETWORK
LOGISTICS
469 POS/259,826 SQM
4 CENTRES/74,414 SQM
LOYALTY CARDS
LOCAL SUPPLIERS
881,001
NUMBER AND TURNOVER
409/58 MILLION EUROS
9
PETROL
STATIONS
5
OPTICIANS
26
PARAPHARMACIES
4
SAPORI&DINTORNI
ICE-CREAM SHOPS
Including figures on the DAO cooperative.
19
Conad
Centro Nord
Via Kennedy 5
Campegine
(Reggio Emilia)
SALES
CONSOLIDATED
NETWORK
1,215
226
88
NETWORK TURNOVER
MILLION EUROS
NET WORTH
MILLION EUROS
INVESTMENT
MILLION EUROS
Present in
Emilia-Romagna (Parma, Piacenza, Reggio Emilia)
Lombardy (Bergamo, Brescia, Como, Cremona, Lecco, Lodi, Mantua, Milan, Monza Brianza,
Pavia, Sondrio, Varese)
Market share
5.5% in the relevant area
Emilia-Romagna 24.3%
Lombardy 3.0%
Source: GNLC 2nd half of 2015
401
SHAREHOLDERS
4,648
EMPLOYEES
SALES NETWORK
LOGISTICS
237 POS/181,625 SQM
8 CENTRES/61,000 SQM
LOYALTY CARDS
LOCAL SUPPLIERS
866,238
NUMBER AND TURNOVER
598/159 MILLION EUROS
1
PETROL
STATIONS
2
OPTICIANS
10
PARAPHARMACIES
3
SAPORI&DINTORNI
STORES
21
Commercianti
Indipendenti
Associati
Via dei Mercanti 3
Forlì
SALES
CONSOLIDATED
NETWORK
1,410
576
80
NETWORK TURNOVER
MILLION EUROS
NET WORTH
MILLION EUROS
INVESTMENT
MILLION EUROS
Present in
Emilia-Romagna (Forlì-Cesena, Ravenna, Rimini)
Marche (Ancona, Pesaro-Urbino)
Veneto (Belluno, Padua, Treviso, Venice, Rovigo)
Friuli Venezia Giulia (Gorizia, Pordenone, Trieste, Udine)
Republic of San Marino
Market share
12,6% in the relevant area
Romagna 43.9%
Marche 12.9%
157
SHAREHOLDERS
Source: GNLC 2nd half of 2015
6,500
EMPLOYEES
SALES NETWORK
LOGISTICS
LOYALTY CARDS
LOCAL SUPPLIERS
4
PETROL
STATIONS
5
RESTAURANTS
5
PARAPHARMACIES
2
SAPORI&DINTORNI
STORES
2
OPTICIANS
1
SAPORI&DINTORNI
ICE-CREAM SHOPS
237 POS/165,583 SQM
129,023*
*
Veneto 3.5%
Friuli Venezia Giulia 5.8%
7 CENTRES/102,030 SQM
NUMBER AND TURNOVER
416/187 MILLION EUROS
Only in CIA areas.
23
Conad
Adriatico
Via Manzoni 14
Monsampolo del Tronto
(Ascoli Piceno)
SALES
CONSOLIDATED
NETWORK
963
118
13
NETWORK TURNOVER
MILLION EUROS
NET WORTH
MILLION EUROS
Present in
Abruzzo (Chieti, L’Aquila, Pescara, Teramo)
Basilicata (Matera, Potenza)
Marche (Ascoli Piceno, Fermo, Macerata)
Molise (Campobasso, Isernia)
Apulia (Bari, Barletta-Andria-Trani, Brindisi,
Foggia, Lecce, Taranto)
Market share
12.1% in the relevant area
Abruzzo 24.5% leader
Molise 21.8% leader
Marche 7.9%
249
SHAREHOLDERS
INVESTMENT
MILLION EUROS
Conad Adriatic operates in Albania in Shkoder,
Fier, Kucove, Lushnje, Kavaje, Durres, Korce,
Tirana, Peshkopi, Reshen, Elbasan, Vlore and
Saranda and in Kosovo in Pristina
Basilicata 6.3%
Apulia 7%
Source: GNLC 2nd half of 2015
4,711
EMPLOYEES
SALES NETWORK
LOGISTICS
368 POS/225,069 SQM
7 CENTRES/75,000 SQM
LOYALTY CARDS
LOCAL SUPPLIERS
755,000
NUMBER AND TURNOVER
725/225 MILLION EUROS
2
PETROL
STATIONS
6
RESTAURANTS
10
PARAPHARMACIES
1
SAPORI&DINTORNI
ICE-CREAM SHOPS
2
OPTICIANS
7
24/7S
25
Conad
del Tirreno
Via Bure Vecchia Nord 10
Pistoia
SALES
CONSOLIDATED
NETWORK
2,350
231
44
NETWORK TURNOVER
MILLION EUROS
NET WORTH
MILLION EUROS
INVESTMENT
MILLION EUROS
Present in
Lazio (Rome, Viterbo)
Liguria (La Spezia)
Sardinia (Cagliari, Carbonia Iglesias, Medio Campidano, Nuoro, Ogliastra, Olbia-Tempio,
Oristano, Sassari)
Tuscany (Arezzo, Florence, Grosseto, Livorno, Lucca, Massa-Carrara, Pisa, Pistoia, Prato, Siena)
Market share
Tuscany (including La Spezia and its province) 15.6%
Lazio 23.3% leader (with Pac 2000A)
Sardinia 18.3% leader
Source: GNLC 2nd half of 2015
212
SHAREHOLDERS
9,500
EMPLOYEES
SALES NETWORK
LOGISTICS
341 POS/245,000 SQM
6 CENTRES/142,400 SQM
LOYALTY CARDS
LOCAL SUPPLIERS
1,495,625
NUMBER AND TURNOVER
1,150/378 MILLION EUROS
11
PETROL
STATIONS
3
OPTICIANS
22
PARAPHARMACIES
6
SAPORI&DINTORNI
STORES
27
PAC 2000A
Via del Rame
Ponte Felcino
(Perugia)
SALES
CONSOLIDATED
NETWORK
3,653
590
170
NETWORK TURNOVER
MILLION EUROS
NET WORTH
MILLION EUROS
INVESTMENT*
MILLION EUROS
Present in
Calabria (Catanzaro, Cosenza, Crotone, Reggio Calabria, Vibo Valentia)
Campania (Avellino, Benevento, Caserta, Naples, Salerno)
Lazio (Frosinone, Latina, Rieti, Rome, Viterbo)
Umbria (Perugia, Terni)
Market share
20.1% in the relevant area
Umbria 29.3% leader
Lazio 23.3% leader (with Conad Tyrrhenian)
Calabria 21.6% leader
Campania 16.3%
Source: GNLC 2nd half of 2015
887
SHAREHOLDERS
15,760
EMPLOYEES
SALES NETWORK
LOGISTICS
1,138 POS/653,186 SQM
4 CENTRES/170,000 SQM
LOYALTY CARDS
LOCAL SUPPLIERS
8
PETROL
STATIONS
2
SAPORI&DINTORNI
STORES
18
PARAPHARMACIES
4
SAPORI&DINTORNI
ICE-CREAM SHOPS
2,338,939
NUMBER AND TURNOVER
2,252/757 MILLION EUROS
2
OPTICIANS
*
Development plan 2016-2018.
29
Conad
Sicilia
Contrada Fargione
Aggl. Ind. Modica Pozzallo
Modica
(Ragusa)
SALES
CONSOLIDATED
285
16
NETWORK TURNOVER
MILLION EUROS
NET WORTH
MILLION EUROS
Present in
Sicily (Agrigento, Caltanissetta, Catania, Enna, Messina, Ragusa, Syracuse)
Conad Sicily operates in the Republic of Malta
Market share
7.9% in the relevant area
Source: GNLC 2nd half of 2015
113
SHAREHOLDERS
1,187
EMPLOYEES
SALES NETWORK
LOGISTICS
127 POS/63,320 SQM
5 CENTRES/23,730 SQM
LOYALTY CARDS
LOCAL SUPPLIERS
214,963
NUMBER AND TURNOVER
154/24 MILLION EUROS
31
Sicilconad
Via Madonna del Ponte s/n
Partinico
(Palermo)
SALES
CONSOLIDATED
NETWORK
545
35
4
NETWORK TURNOVER
MILLION EUROS
NET WORTH
MILLION EUROS
INVESTMENT
MILLION EUROS
Present in
Sicily (Agrigento, Caltanissetta, Enna, Messina, Palermo, Trapani)
Market share
23.1% in the relevant area
Source: GNLC 2nd half of 2015
97
SHAREHOLDERS
1,985
EMPLOYEES
SALES NETWORK
LOGISTICS
203 POS/124,404 SQM
7 CENTRES/40,400 SQM
LOYALTY CARDS
LOCAL SUPPLIERS
10
PARAPHARMACIES
4
OPTICIANS
282,672
NUMBER AND TURNOVER
169/68 MILLION EUROS
33
Annual Report 15 Identity
Multi-channel distribution
Its sales network is one of the hallmark
features of the Conad group, the only
modern distribution chain to cover all
formats currently on the market.
It includes different sized stores with
different roles but which share a
common goal: to best meet customers’
needs with constantly high-quality
products and cost-effective own brand
goods.
Perfect reference models have been
defined for every single channel and
stores have been reallocated based on
characteristics and roles rather than
by brand as happened in the past.
Conad has assigned a role to
categories and departments
based on their range, on criteria of
competitiveness for sales prices both
with regard to the competition and
to different channels, on the range
and turnover of own brand products,
as well as on the number of items on
promotion for each individual channel
and brand.
This helps strengthen the value of
the Conad brand and its relationship
with the customer, values which are a
company asset since they establish the
conditions to compete and to play a
leading role on the market.
The channel system lets us
communicate effectively outside
Conad’s typical specific and distinctive
areas, with easily recognisable,
functional stores featuring uniform
content. The goal is to expand the
number of potential customers –
ensuring that they come into stores
and find products and services that
meet their needs, consolidating
the fundamental elements of the
Conad brand’s position – but also to
strengthen its corporate identity and
to achieve the essential economies of
scale for development.
25 CONAD
HYPERMARKET
AVERAGE SALES AREA
4,800 SQM
RANGE
16,000/19,000 PRODUCTS
Provides customers with a wide
choice of brands and products, as
well as Conad own brands, for all their
shopping and stocking needs.
216 CONAD
SUPERSTORE
AVERAGE SALES AREA
1,800 SQM
RANGE
10,500/12,000 PRODUCTS
Combines the ease and convenience of
quick, simple shopping close to home
complete with a wide range of products
and services.
1.028 CONAD
AVERAGE SALES AREA
800 SQM
RANGE
7,000/8,500 PRODUCTS
The supermarket where quality and
convenience come together in a range
of products and services for all your
shopping needs.
995 CONAD CITY
AVERAGE SALES AREA
400 SQM
RANGE
4,500/5,500 PRODUCTS
The compact size and selection of
foods offer convenient, quick shopping
right on your doorstep.
34
518 MARGHERITA
AVERAGE SALES AREA
140 SQM
RANGE
ABOUT 1,500 PRODUCTS
The shop on your doorstep for quick
everyday shopping or a few extra
things after your bigger supermarket
shops.
13 SAPORI&DINTORNI
AVERAGE SALES AREA
500 SQM
RANGE
3,000/4,000 PRODUCTS
The essence of typical Italian regional
delicacies, these stores can be found
in the main Italian cities of art and help
strengthen the bond with the region.
198 TODIS
AVERAGE SALES AREA
530 SQM
RANGE
5,000/7,000 PRODUCTS
The discount store set up to meet an
emerging need, offering excellent value
for money and all about product range
and organisation.
Market
Annual Report 15 Market
The scenario
The global
and European economy
It was supposed to be the year of
recovery, but instead 2015 failed
expectations. As the months went
by, various factors came along to
hold back the coveted upswing: the
slowdown of the Chinese economy
followed by other emerging countries
such as Brazil and Russia, the
plummeting price of oil and other raw
materials, tensions in the Middle East
with the war in Syria and the Paris
attacks, as well as the repercussions
of the credit boom on banks.
In October, the International Monetary
Fund cut growth forecasts for global
GDP by 0.2% down to 3.1%. “Six years
after the world economy emerged
from its broadest and deepest
postwar recession, the holy grail
of robust and synchronised global
expansion remains elusive”, wrote
Maurice Obstfeld, the chief economist
at the IMF, in the introduction to the
World Economic Outlook.
Eurozone countries have suffered the
38
effects of the global climate and have
not completely managed to keep their
heads above water, despite help from
the European Central Bank. Inflation
has remained close to zero, while GDP
in members of the single currency has
grown by 1.5%, which is 0.1% lower
than forecast.
However, in 2014, GDP only grew by
0.9% so there was a very faint sign
of recovery. Many factors pulled the
industrial recovery along one small
step at a time: the increase in wages
in Germany, the Netherlands, France
and Spain, the fall in unemployment
(standing at 10.9%), the recovery
of the property market, domestic
demand and consumption (1.8%),
as well as moderate investment
growth (+1.7%). There is sign that,
albeit slowly and painstakingly, the
Old Continent is emerging from a
long period of stagnation, but many
unknowns still remain.
Annual Report 15 Market
2015
in Italy
Last year’s balance sheet is showing
the first positive signs for Italy as well.
After eight years of deadlock, Italy is
starting to see positive signs again
in investments (+0.8%) and in GDP
(+0.8%), after three years of falls. Albeit
moderate growth has helped reduce
the deficit/GDP ratio to 2.6%, following
3% in 2014, when government debt
hit an all-time high of €2,170 billion,
amounting to 132.6% of GDP.
Among the positive factors, it is worth
noting the fall in unemployment which
went down to 11.9% (the lowest figure
in the last three years), even though
youth unemployment, while falling by
3.6%, continues to show a drastically
high figure, standing at 37.9% (15.9
points above the European average of
22%). Unfortunately, Italy is still far
away from the levels in countries such
as Germany, where unemployment
sits at around 7%, so much so that, in
Europe, only Greece and Spain perform
worse than the Italians.
Nevertheless, in 2015, Italian industry
began on the road to recovery,
recording production growth of +1%
working days in the first nine months.
Encouraging figures are coming from
exports, which have increased by
+3.7% with a boom in the USA, where
exports grew by +20.9% and the value
of goods exceeded €6.2 billion.
Stagnating prices are concerning, with
an average annual rate of inflation in
2015 of +0.1%, the lowest in over half a
century since 1959.
This index has been dragged down by
the prices of food, household cleaning
and personal hygiene products, falling
by 0.3%, as well as unprocessed foods
(-0.7%).
However, it is undeniable that 2015 has
seen growth in confidence indicators,
with renewed buying characterised
by a boom in consumer credit that
is unrivalled around Europe (+35%).
According to the findings of the Global
Consumer Confidence Survey, 20% of
Italians thought that the crisis was over
in 2015 and 14% of the pessimists –
who had fallen from 62% in late 2014 to
44% – said they were sure that by the
end of 2016 we would emerge from an
economic situation that is still in crisis
in certain respects.
Fear and uncertainty are giving way
to flashes of optimism. Household
spending review measures also eased
in 2015: the number of Italians who
spent less fell by 8 points from 72% in
2014 to 64% (source: Nielsen Global
Consumer Confidence Survey - Q3 15).
However, household consumption
shows that buying habits have
permanently changed and will not
return to pre-crisis levels. Various
indicators give reason to believe that
the improvement in households’
current economic conditions will
not lead to an improvement in
consumption standards in the
immediate future.
39
Annual Report 15 Market
The agri-food
industry trend
The Expo effect was not enough, nor
was a warm summer finally suited to
seasonal consumption and even the
excellent performance of exports did
not do the trick to pull the Italian agrifood industry out of the mire. In the
words of Federalimentare, in 2015, “the
sector did not manage to convincingly
free itself from the powerful wake of
the crisis that occurred seven years
ago”. In short, the long-awaited turning
point never came and even 2016 is
promising to be another weak year. The
worst numbers come from the internal
market. While, since the beginning of
the crisis, turnover from sales on the
domestic market has lost, at constant
rates, about 15 points, Ismea-Nielsen
figures from the first nine months of
2015 do not show a reversal of this
trend. In fact, the increase of +0.3%
at constant rates corresponds – on
the basis of the average +0.9% in
consumer food prices – to -0.6%
in sales volume. According to
Federalimentare, the average figure
is then “drugged” by the explosion
in certain departments that have
40
experienced an exceptional boom, such
as drinks and mineral water (+9.8%),
beer (+6.8%), oils and vegetable fats
(+9.0%) and, in particular, olive oil
(+16.5%).
The organic sector alone keeps running
at a steady pace, with an increase of
around +19%, after recording +11%
in 2014. The turnover of bio-based
products in the domestic channel alone
has far exceeded €2 billion, 40% of
which comes from large supermarket
chains and two thirds in North Italy
(source: Ismea Bio Report – Retail).
But while the internal market is
languishing, the foreign market is in
rude health. The 2015 figures also
seem to confirm that the industry
must focus on promoting the Made in
Italy label beyond its borders. In fact,
in December 2015, exports touched
€29 billion, recording an increase of
+6.7% compared with 2014 (source:
Federalimentare on Istat data).
Therefore, according to estimates, the
sector has all the potential it needs to
reach the threshold of €50 billion by
2020.
Annual Report 15 Market
Retail sector focus
The negative trend in the Italian retail
sector was finally halted in 2015,
following a dark two years from 2013
to 2014. In fact, the past year has seen
a slight positive trend in sales – in
both volume and value – and the retail
network turnover trends are once
again substantially stable, following
losses in 2014.
Under the complex Expo effect, the
fall in consumption seems therefore
to have halted, particularly so in the
middle of the year. According to the
Nielsen findings, the sales value trend
recorded an increase of +1.8%, driven
by the good performance of consumer
packaged goods (+1.5%), although
the trend is still negative for nonfood goods (-4%). Sales are growing
for drinks and fruit and vegetables
(due to the hot summer), but also for
groceries and packaged fixed-weight
fresh food; however, random-weight
fresh food is on the decline with a
substantial fall in meat, including
faced with a shift in sales to the
packaged fresh food sector (source:
Guida Nielsen Largo Consumo – 2nd
half of 2015).
Spending has been supported by
the stability of shelf prices and
the continuation of supermarket
promotions: again according to
Nielsen, between January and
October, the number of products on
promotion rose by 3.8%, but sales
42
value for promotional initiatives fell by
0.5% compared with the same period
in 2014.
The most satisfactory results come
from hypermarkets and supermarkets,
with a positive trend of +1.8%. Once
again, customers are sticking with
medium and medium-large sized
retailers: indeed, the highest spike is
found in the supermarket channel with
growth of +2.5%. However, the past
year has confirmed the crisis suffered
by small neighbourhood shops (whose
number has fallen further) and by
larger hypermarkets, while discount
stores keep expanding their presence.
But, as previously mentioned, 2015
is showing the first embryonic signs
of a shift in trends, which is reflected
by consumers’ new buying habits.
While savings are always the top
concern among shoppers, the trend
is showing a gradual return towards
quality, even when it involves a greater
outlay. The range of brand products
is increasing in supermarkets and, at
the same time, we are seeing a plunge
in value line products, falling by -28%.
Consumers’ focus is once again falling
on retailers’ own brand products
(18.8% of the market), which are
generally experiencing a moderately
positive trend (+1.4%); although this
becomes decidedly more appreciable
in the premium and organic categories
(+13%).
GROCERY TRENDS
VALUE AND VOLUME
VALUE AT CONSTANT PRICES
1.5
0.8
Values
Volumes
0.1
-0.5
-0.7
-0.8
-1.2
-1.3
2012
2013
2014
JANUARY-DECEMBER 2015
Source Nielsen Trade *Mis
+0.2%
STORE TOTAL
+1.5%
CONSUMER
PACKAGED GOODS
-1.0%
RANDOM-WEIGHT
FRESH
FOOD
-4.0%
NON
FOOD
+3.4%
DRINKS
+2.3%
FRESH FOOD
+2.1%
PETS
+1.9%
CHILLED
+0.9%
PACKAGED FOOD
+0.3%
PERSONAL HYGIENE
-0.8%
HOUSEHOLD CLEANING
Source Nielsen Trade *Mis
43
Annual Report 15 Market
Consumption
and confidence
Has the tide really turned in 2015?
Are Italian consumers really starting
to feel confident again in the future,
changing their buying habits too? Data
on household habits over the past year
seems to suggest so, even though
certain difficulties and critical issues
still linger.
We are a long way from the
consumption levels of eight years ago
and Italy appears more split in two
now than ever: not just the South,
but middle-lower class consumers
still also seem stuck in the recession.
While in 2015, southern Italy once
again recorded a fall in consumption
(-3%), the whole of the country, faced
with a slight recovery in household
food spending (+0.2%), recorded an
increase in purchasing volume just
for high and medium-high income
households, but for lower and middlelower classes it continued to fall
(source: Nielsen Consumer Panel – up
to the end of October 2015).
According to the Filcams Cgil
2015 Report on Italian household
consumption (produced in
collaboration with the Tecnè-Italia
Research Institute and the Fondazione
Di Vittorio), 29% of interviewees
claimed they could not support their
actual needs (food, clothes, care,
rent, mortgage and bills, children’s
education, etc): essentially meaning
one household in three, a still very large
part of the population.
Given that they are now used to
saving wherever possible, last year,
eight households in ten did their
shopping during sales or special offers,
amounting to a total of roughly €153
billion. Almost one in five (18%) went
bargain hunting on the Internet and, in
7% of cases, searched for second-hand
products.
But while it is true that the need to
cut costs still characterises Italians’
purchasing habits, when it comes to
choosing between the various types of
products, the search for quality rules
the roost, especially with food.
44
Despite their financial straits,
households are more inclined to spend
money on food and drinks that are
“healthy” or satisfy their palate. Over
nine consumers in ten say they are
willing to pay more for food with health
benefits and 62% confirm that their
main driver for buying a product is
freshness, along with the presence of
natural ingredients (source: Nielsen
Global Healthy Eating Report, 2015).
In fact, consumption is increasing of
products ideally linked to a healthy
diet – such as dried pulses (+13%),
the symbol of the Mediterranean diet
– which, at the same time, are also
low-cost, but so are more expensive
foods such as dried fruit (+11%),
organic products (20%), soya and
rice-based drinks (+23%), digestible
milk (+10%) and whole grains (+14%).
65% of Italians look to buy PGI, CDO or
PDO products. More and more Italians
are focusing on the sustainability of the
food they put on their tables: 56% try
to eat only Italian foods, 34% choose
zero-mile products, 52% care about
where their food comes from and 38%
look at the composition of food and
its nutritional value. The composition
of food and the production chain
have also become more important:
over six consumers in ten (63%) want
companies to put more information
on their product labels (Nielsen Global
Survey on Health, Wellness and
Nutrition, Report, 2015).
Among Italians, aperitifs (+4%) and
products for preparing gourmet
dinners (+10.9%) are also making a
comeback.
The now chronic lack of time is also
shifting purchases towards pre-cooked
foods: in fact, sales of ready meals
have surged by 9% and, in contrast,
consumption of ingredients for making
pizzas and cakes at home has fallen by
5.8%.
Finally, it is worth looking at the buying
habits of millennials, the portion of
the population who are now under 35
and have determined the new trends
ITALIAN CONFIDENCE
2015
64%
START OF THE FINANCIAL CRISIS
88
2006
2014
64
72%
57
52
46
2010
2011
2012
47
2013
47
2014
2015
The percentage
of Italians who
say they adopt
saving measures
is falling.
Source Nielsen Global Consumer Confidence Survey, Q3 2015
THE EUROPEAN CLIMATE
CONFIDENCE
INDEX
MAIN 1.
CONCERNS 2.
ITALY
FRANCE
GERMANY
UK
57
66
SPAIN
WORK
HEALTH
TERRORISM
WORK
WORK
ECONOMY
TERRORISM
IMMIGRATION
IMMIGRATION
WORK
75
100
103
Source Nielsen Global Consumer Confidence Survey, Q3 2015
45
Annual Report 15 Market
A COUNTRY
DIVIDED IN HALF
NORTH-SOUTH
AND RICH-POOR
DIVIDE
Average food expenditure
+0.2%
ITALIAN AVERAGE
Italy appears more
split in two now
than ever: not just
the South, but
middle-lower class
consumers still also
seem stuck in the
recession.
-3%
SOUTH
Consumption trend based on income
which are influencing the panorama
of national consumption. Younger
families are also proving to be the
Achilles’ heel of consumer goods in
2015, taking into account that last year
their supermarket spending fell by 4%
compared with -0.4% among older
families (35-54 year olds). Hopelessly
disloyal with their choice of stores,
millennials are highly informed about
what they are buying, whether it is food
or other goods: 96% of them mainly
get their information from the Internet.
62% trust the opinions of other users
they find online, 57% visit comparison
websites and 33% consult company
portals or Facebook pages. Modern
retail models must learn to measure
up to this new type of more attentive,
demanding and disloyal consumer
(source: Nielsen Survey, March 2015).
HIGH
+5.3
MEDIUMHIGH
+4.2
MEDIUMLOW
-1.7
LOW
-7
Nielsen Consumer Panel – up to the end of October 2015
47
Annual Report 15 Market
The legislative framework
and reforms
Another year of broken promises has
gone by, at least in terms of reforms to
modernise the market and liberalisation.
In February 2015, the Council of
Ministers passed the annual bill for
the market and competition, which
Parliament had to approve in principal
by the end of the year. In actual fact,
this provision got bogged down for
months in Parliament with hearings and
amendments, taking one step forward
then two steps back. In June 2016, by
now stripped of its more meaningful
contents, it still had to go before the
Senate for final approval.
The IMF’s warning once again went
unheeded, which emphasised on several
occasions that accelerating competition
would lead to growth of 3.5% for Italy
in the next five years and 7.5% in the
long-term. The estimates of the Ministry
of Economic Development were used to
line the waste paper bin, which released
a document (hearing of Minister Guidi
at the 10th Committee on “Industry,
Trade and Tourism”, at the Senate of the
Republic on 22 October 2015) showing
that a series of liberalisation measures
in the services market would lead to
3.5% GDP growth in five years, as well
as an increase in consumption of +4.1%,
an increase in investment of +3.7%,
higher real wages (+1.6%) and greater
productivity at work (+4.9%).
The issues that “disappeared” from
the bill included the liberalisation of
48
class C medicines, which are expensive
for consumers and the world of
parapharmacies, including those in
supermarkets. The very first draft of the
text contained an Article that extended
the sale of non-refundable prescription
medicines to parapharmacy channels
and supermarket counters, provided
there is a pharmacist. However, the
Article was then deleted and any
subsequent attempts to reintroduce
it in Parliament were blocked. The
current text merely deregulates
pharmacies’ opening times and
removes the limit of 4 licences owned
by the same individual, allowing chains
and large groups to enter the market.
However, it did not touch upon the
main issues, i.e. putting an end to the
restriction on pharmacy numbers
and the liberalisation of the sale of
medicines to citizens, thereby ignoring
the recommendations of the Antitrust,
as well as the vociferous protests
from parapharmacy representatives
and pharmacists who do not own a
pharmacy. To make waves, Conad set
up a public petition to ask the Cabinet to
intervene in the matter. By May 2016, it
had exceeded 150,000 signatures.
But the Government has reiterated its
intention on several occasions not to
alter the status quo.
Despite expectations, the liberalisation
of the fuel distribution system has also
not made any ground, another area
Annual Report 15 Market
where the competition bill has not
taken any significant steps forward.
Indeed, the text makes no decisive push
towards the rationalisation of refuelling
points, which are bigger than average
in Italy and increase costs for the whole
system, which is passed down to the
final price of fuel. This is known as the
“Italian gap”, where the gap is the price
difference which Italians pay for petrol
and diesel compared with the rest of
Europe, partly down to this factor.
The government announced that it
intends to continue along the path
started by the liberalisation bill with
a second annual law on competition
to be passed in 2016, based on the
recommendations of the Antitrust
Authority.
However, the current scenario does
not bode well. One only has to think
that the annual law on competition was
established in 2009 and the bill (which
has still not seen the light of day) would
be its first act of enforcement.
49
Annual Report 15 Market
Market results
The turnover
of the Conad network
Even over the past two years, the
Conad network’s turnover had shown
positive results, markedly bucking the
sector trend. So it is no surprise that
2015, while finally marking the start of
the turning point for major retailers,
was yet another successful year for the
Conad system, characterised by good
results and a further improvement in
margins. Indeed, the 2015 financial
year ended with a final network balance
of €12.2 billion, showing an increase of
4% compared with 2014, accounting
for €490 million. It is a decidedly
positive and ever-growing trend
thanks to a network of entrepreneur
shareholders who are deeply rooted in
the communities where they work and
skilled in teamwork, working alongside
regional cooperatives. This has
50
allowed us to overcome tougher times,
succeeding in the hard task of meeting
consumers’ changing needs against a
radically altered economic backdrop.
One only has to think that since 2006
to date, the Conad network’s turnover
has increased by 45.2%, without
suffering any setbacks.
In December 2015, Conad recorded
a sales value trend for packaged
products of +1.1% across the network,
compared with 0.9% in the sector.
Moreover, throughout the year, it also
recorded network growth, increasing
from 3,015 stores to the current figure
of 3,055. Forecasts for 2016 show a
further consolidation of its regional
presence, supported by €188 million
in investment, which will lead to the
creation of 880 new jobs in Italy.
CONAD SALES NETWORK
TURNOVER GROWTH
IN MILLION EUROS
12,158
11,668
11,555
10,907
10,160
9,7 76
9,299
8 ,757
8,204
7, 8 1 8
2015
+4.0%
2014
+1.0%
2013
+5.9%
2012
+7. 3
2011
+4.0
2010
+5.0
2009
+6.2
2008
+6.7
2007
+4.9
2006
SIMILAR TREND AS THE
2015 NETWORK
CPG TOTAL
Conad Super
Whole of Italy
3.6
1.1
2.1
0.7
3.3
-2.2
-0.5
0.9
2.0
1.1
1.3
1.4
OCTOBER
SEPTEMBER
AUGUST
JULY
JUNE
MAY
APRIL
MARCH
1.5
1.3
1.0
0.3
0.4
0.5
0.5
0.7
0.9
0.9
0.9
NOVEMBER
0.6
0.5
OCTOBER
0.8
1.0
1.0
-3.0
1.2
1.5
1.0
-0.4
-3.3
1.7
1.8
1.2
DECEMBER
0.1
2.6
SEPTEMBER
2.0
2.0
1.9
1.1
0.9
DECEMBER
0.0
AUGUST
0.1
JULY
APRIL
-0.1
JUNE
-0.2
MARCH
0.1
FEBRUARY
-0.5
MAY
0
JANUARY
VARIATION % OF
PROGRESSIVE SALES
VALUE OVER THE YEAR
0.7
4.4
NOVEMBER
1.7
FEBRUARY
5.0
4.0
3.0
2.0
1 .0
0
-1 . 0
-2.0
-3.0
-4.0
JANUARY
VARIATION % OF
SALES VALUE
MONTH BY MONTH
OVER THE YEAR
Source Iri
51
Annual Report 15 Market
Store
productivity
Productivity indicators show that
Conad stores, with €5,930 in sales per
square metre, are far above the national
average of €5,350/sqm. Moreover, this
parameter does not take into account
the average size of each brand’s stores:
indeed, at Conad, this equates to
630 sqm, which is below the national
average and a long way off chains such
as Esselunga (3,039 sqm), Iper (1,539
sqm) and Coop (1,190 sqm).
It is also worth emphasising
the excellent performance of
Sapori&Dintorni stores, which boast
a productivity rate of about €10,000/
sqm.
Finally, it should be noted that
productivity in the Conad network
varies considerably based on
geographical area: it hits €7,100/
sqm in the North East (compared with
the average of €5,320/sqm for other
chains in the area) and €6,800/sqm in
the Centre, while in the South, it falls
to €4,600/sqm (although remaining
above the average of €3,750/sqm); it
is only in the North West with €5,600/
sqm that it falls below the market
average of €6,320/sqm (source: Guida
Nielsen Largo Consumo).
52
PRODUCTIVITY IN THE
COMPETITIVE FRAMEWORK
VALUES IN THOUSAND EUROS
Average productivity 5.35
ESSELUNGA
17.71
Average sqm 3,039
(+0.1%)
COOP
7.45
Average sqm 1,190
(+1.3%)
IPER
6.73
Average sqm 1,539
(+1.4%)
EUROSPIN
6.03
Average sqm 782
(-3.8%)
CONAD
5.93
Average sqm 630
(+0.9%)
CARREFOUR
5.84
Average sqm 889
(+2.1%)
AUCHAN
4.85
Average sqm 782
(-3.0%)
SELEX
4.47
Average sqm 851
(+1.4%)
Conad network stores divided by cooperative
STORES, AREAS
AND EMPLOYEES
BY COOPERATIVE
Commercianti
Indipendenti Associati
8%
Sicilconad
7%
Conad Adriatico
12%
Conad Centro Nord
8%
Pac 2000A
35%
Conad del Tirreno
Area and number of employees
11%
Conad Sicilia
Nordiconad
14%
smq
employees
5%
Pac
2000A
Nordiconad
Conad del
Tirreno
Conad
Adriatico
Conad
Centro Nord
CIA
Sicilconad
Conad
Sicilia
653,186
259,826
245,000
225,069
181,625
165,583
124,404
63,320
15,760
6,636
9,500
4,711
4,648
6,500
1,985
1,187
The number of employees is in white and the area is coloured.
53
Annual Report 15 Market
Market shares
Conad’s leadership in the supermarket
channel continues to strengthen,
recording an extra percentage point
in 2015: 20.1% compared with 19.3%
in 2014. It is another milestone, which
rewards a strategy focused on a
particularly popular format among
customers, where range, quality and
convenience find the perfect mix in
a market that seems to want to look
forward but is still overshadowed by
the crisis.
Conad is also the top brand among
neighbourhood stores, remaining at a
13.9% share and losing just 0.2% in a
year when many small retailers closed.
It remains substantially stable in the
hypermarket category with a 4.5%
share (4.3% in 2014), where it sits in
eighth place in a scene dominated by
Coop (23.7%) and Esselunga (23.3%).
In the general competitive framework
of the sector, it has held onto second
place with a 11.9% share (+0.2%
percentage points compared with
2014), sitting just 2.6 points behind the
leader (Coop with 14.5%) and keeping
its distance from Selex (9.7%) and
Esselunga (8.9%); the latter are the
only two brands, along with Conad,
which have consistently increased
their market shares in recent years,
while Coop and the French giants,
Auchan and Carrefour, are showing an
ongoing, gradual fall which has still not
halted since 2011.
However, when looking at regional
penetration, Conad is the top brand
in Abruzzo, Molise, Lazio, Umbria,
Calabria, Sicily and Sardinia – holding
absolute leadership – while in Emilia,
the Aosta Valley and Campania it is in
second place and third in Tuscany. Its
highest shares are in the Centre, in the
supermarket sector, where the Conad
brand stands out with 26.6% of the
market.
CONAD’S
REGIONAL POSITION
Regions where Conad is leading
Regions where Conad is second
Regions where Conad is third
Regions where Conad is in other positions
54
MARKET SHARE BY BRAND
Italian total
COOP
CONAD
SELEX
ESSELUNGA
AUCHAN
CARREFOUR
EUROSPIN
VEGE
PAM
FINIPER
LIDL
AGORÀ
SUN
LILLO
ASPIAG
CRAI
SIGMA
SISA
14.5%
11.9%
9.7%
8.9%
6.7%
6.1%
5.1%
3.4%
3.0%
2.8%
2.7%
2.5%
2.5%
2.3%
2.2%
2.2%
2.2%
2.0%
* Others <2: Bennet (1.9) – C3 (1.5) – Rewe (1.3) – Despar (1.2) – Cat. Indip. (1.1) – Neg. Indip. (1.0) – Tuo
(0.9) – Cds Spa (0.2) – Coralis (0.2 ) – S&C (0.0)
Supermarket total
CONAD
COOP ITALIA
SELEX
CARREFOUR
AUCHAN
SUN
VEGE
AGORÀ
ESSELUNGA
ASPIAG
SIGMA
PAM
SISA
CRAI
FINIPER
20.1%
14.5%
13.3%
6.8%
5.9%
4.6%
4.5%
3.9%
3.6%
3.2%
3.1%
2.8%
2.7%
2.4%
2.3%
* Others <2: C3 (1.8) – Despar (1.7) – Cat. Indip. (1.0) – Neg. Indip. (0.8) – Cds Spa (0.3) – Disco Verde
(0.1) – Coralis (0.2) – Bennet (0.0) – Briò (0.0) – S&C (0.0)
Mini-market total
CONAD
CRAI
VEGE
AUCHAN
CARREFOUR
COOP ITALIA
SISA
SELEX
SIGMA
NEG. INDIP.
DESPAR
ASPIAG
PAM
13.9%
10.6%
9.5%
8.2%
8.2%
7.9%
6.8%
6.5%
6.3%
5.8%
3.3%
2.7%
2.5%
* Others <2: Sun (1.7) – C3 (1.6 ) – Cat. Indip. (1.3) – Agorà (0.9) – Finiper (0.8) – Coralis (0.6) – S&C (0.3)
– Cds Spa (0.3) – Briò (0.2)
55
WEIGHT OF THE DIFFERENT TYPES
out of the total market
MINI-MARKET
10.7%
HYPERMARKET
31.8%
DISCOUNT
STORE
15.7%
SUPERMARKET
41.8%
TOP FIVE BY TYPE
IPER
Coop Italia
Esselunga
Auchan
Selex
Carrefour
23.7%
23.3%
10.3%
8.2%
7.5%
DISCOUNT
Eurospin
Lidl
Lillo
Penny
Tuo
32.5%
17. 3%
14.3%
8.5%
5.7%
73.0%
SUPER
Conad
Coop Italia
Selex
Carrefour
Auchan
78.2%
LIBERO SERVIZIO
Conad
13.9%
Crai
10.6%
Vegè
9.5%
Carrefour
8.2%
Auchan
8.2%
20.1%
14.5%
13.3%
6.8%
5.9%
60.7%
50.4%
Conad is consolidating its leadership in Supermarkets, where its share is growing, and in Minimarkets.
WEIGHT OF THE DIFFERENT AREAS
OF THE COUNTRY
out of the total market
AREA 4
19.4%
AREA 1
33.4%
AREA 3
25.0%
AREA 2
22.2%
TOP FIVE BY AREA
AREA 1
Esselunga
Carrefour
Coop Italia
Selex
Finiper
19.8%
11.3%
10.7%
10.7%
6.9%
AREA 3
Coop Italia
Conad
Auchan
Eurospin
Esselunga
21.2%
18.8%
7.5%
7.3%
6.0%
59.5%
60.7%
AREA 2
Coop Italia
Selex
Conad
Aspiag
Eurospin
21.3%
15.1%
12.7%
10.1%
3.8%
63.0%
AREA 4
Conad
Vegè
Auchan
Eurospin
Sisa
15.3%
10.3%
9.4%
8.4%
6.7%
50.1%
Conad is confirming its leadership in Area 4, strengthening in Area 2 (moving up to third place
thanks to its takeovers) and consolidating second place in Area 3.
WEIGHT OF THE TYPE OF SUPERMARKET
in different areas of the country
AREA 1
11.0%
AREA 3
12.0%
AREA 2
10.3%
AREA 4
8.5%
TOP FIVE BY AREA
TYPE OF SUPERMARKET
AREA 1
Carrefour
Selex
Agorà
Coop Italia
Conad
15.5%
14.9%
10.8%
10.6%
9.3%
AREA 3
Conad
Coop Italia
Selex
Sun
Auchan
26.6%
23.4%
8 .9 %
8 . 3%
6.4%
61.1%
73.7%
AREA 2
Coop Italia
Conad
Selex
Aspiag
Agorà
21.6%
19.4%
18.5%
13.0%
4.3%
AREA 4
Conad
Vegè
Selex
Sisa
Auchan
23.2%
15.8%
11.4%
9.5%
7.8%
76.7%
67.8%
For Supermarkets, Conad is strengthening its leadership in Areas 3 and 4, while it controls
a major share in Area 2 and is growing in Area 1.
Source: GNLC 2nd half of 2015
56
Nielsen Area 1 – North West: Piedmont, Aosta Valley, Liguria and Lombardy
Nielsen Area 2 – North East: Trentino-Alto Adige, Veneto, Friuli-Venezia Giulia and Emilia-Romagna
Nielsen Area 3 – Centre: Tuscany, Umbria, Marche, Lazio and Sardinia
Nielsen Area 4 – South and the Islands: Abruzzo, Molise, Apulia, Campania, Basilicata, Calabria and Sicily
Annual Report 15 Market
The success of Conad
brand products
Trust, quality and price. These are the
successful factors of Conad brand
products, which again performed
better than their competitors in 2015,
recording double-digit growth. With
2,629 products and eight special lines
(Conad logo rosso, Conad Il Biologico,
Conad Kids, Sapori&Dintorni Conad,
Conad AC, Conad Piacersi and Conad
Percorso Qualità), Conad brand
products generated €2.8 billion in
turnover in 2015 (+10% compared with
2014).
This is once again a positive result,
especially if we look at the general
trend of the private label market.
According to IRI findings (supermarket
channel – consumer packaged goods
+ pre-packed fruit and vegetables),
own brand products in Italy, which
registered their first fall in Italy in
2014, began to grow again in 2015 –
particularly in the second half of the
year – ending the year at +1.4% in
value, albeit not enough to reverse
the trend of the national share, which
lost 0.2% compared with the previous
year, sitting at 18.8%. However, the
Conad brand share remained steady
at 26.4% in the supermarket channel,
thus towering above the average by 7.6
points.
This share rises to 29% if we look at
the domestic market total of own brand
products in the same channel: with
Conad selling 1 product in every 3.
There have been excellent performance
from individual lines: Conad logo
rosso registers +9%, Conad Percorso
Qualità +8%, Sapori&Dintorni Conad
keeps growing by double digits (+12%),
while Conad Il Biologico has achieved
a real feat: +30%. Alongside the top
ranges, product lines for special
consumer categories are also making
headway. Piacersi, with 41 products,
generated €44.3 million in turnover,
while Alimentum Conad (AC), designed
for people with specific nutritional
needs, achieved €23.8 million with 58
products and Conad Kids, designed to
provide children with a balanced diet,
generated €9.9 million with just 24
products.
OWN BRAND VALUE SHARE
GROWTH 2010-2015
Conad Super
Supermarkets (ECR)
30
25
20
15
22.6
16.3
17.0
26.4
26.2
24.7
23.7
18.0
19.1
26.4
19.0
18.8
10
5
0
2010
2011
2012
2013
2014
2015
Source Iri
58
Sicilconad
3.1%
CONAD OWN BRAND
% SOLD BY COOPERATIVE
Conad Sicilia
2.0%
DAO
1.4%
Pac 2000A
25.3%
Conad Adriatico
6.0%
Conad Centro Nord
10.9%
Nordiconad
11.8%
Conad del Tirreno
20.4%
Commercianti
Indipendenti Associati
19.1%
OWN BRAND TURNOVER,
NET WORTH AND SHARE
Conad Own Brand Share (% of CPG)
Conad network turnover (Euros/billions)
Aggregate net worth (Euros/billions)
12
11.0
10.2
10
8.8
8
9.8
11.7
26.2%
26.4%
22.6%
7.1
30%
28%
26.4%
24.7%
8.2
26%
24%
23.7%
22%
21.7%
6
Euros/billions
9.3
11.6
12.2
20%
20.4%
4
18%
18.3%
16%
2
14.0%
0
1.04
1.24
1.36
1.48
1.58
1.73
1.86
1.91
2.10
14%
12%
0.77
2006
2007
2008
2009
2010
2011
2012
2013
2014
Own Brand % Share of CPG
14
2015
A retailer’s success goes beyond turnover (dynamic power) to include net worth (capital power) and own brand share (loyalty power).
59
For people
and the community
Annual Report 15 For people and the community
Conad and household savings
For monthly
spending
Conad has shown a concrete, tangible
commitment to protecting customers’
purchasing power during the long
period of major economic crisis and
this continued into 2015.
The ever-growing range of brand
products, the promotions on a vast
number of products and brands, as
well as initiatives such as “Bassi&Fissi”,
all helped add lots more solid value
to families’ shopping baskets. This
commitment can also be seen in the
fresh food sector, where it continuously
offers high-quality products at
affordable prices.
In 2015, discounts at Conad stores
generated €673 million in savings
for customers just in the consumer
packaged goods sector (source: IRI),
while still providing a high level of quality.
The extension of the national
“Bassi&Fissi” promotion – which,
once again in 2015, lowered the price
of 337 essential brand products by an
average of 23%, such as milk, coffee,
butter, nappies, etc – generated a
quantifiable annual saving of about
€1,200 for households, a significant
sum when examined in the context of
Italian consumption.
62
The average Italian household spends
€2,488 a month on all goods and
services (source: Istat, 2014), a sum
which falls in southern Italy (€2,003)
and in the islands (€1,871). Pausing
just to reflect on expenditure on
food products and non-alcoholic
drinks, the average spend is around
€436 a month, with the highest
figure in the Centre (€449) and
the lowest in Sicily and Sardinia
(€410). The gap obviously increases
if we examine households based
on their professional status: the
average household expenditure for
entrepreneurs and professionals is
€503 a month, for pensioners it falls
to €426 and for the unemployed it
plummets to €382.
In this framework – and in a
macroeconomic scenario that gives
no reason to hope for sudden surges
in consumption, especially among
poorer sections of the population –
large retail welfare initiatives take on
greater significance, even though they
must not and cannot replace the role
of institutions, which are in charge
of putting solid measures in place to
relaunch consumption.
Household monthly
food expenditure
ITALY
Average household
€436
CONAD B&F*
Average household
€336
-23%
* THIS COMPARISON HAS BEEN
MADE BY APPLYING THE STEADY
SAVING GUARANTEED BY
CONAD WITH THE BASSI&FISSI
INITIATIVE TO THE COST OF THE
AVERAGE ITALIAN HOUSEHOLD’S
SHOPPING, COVERING 337 BRAND
PRODUCTS REDUCED BY 23%
COMMONLY FOUND IN SHOPPING
BASKETS.
Source Istat
NORTH
Average household
€434
Source Istat
64
Source Conad
CENTRE
Average household
€449
SOUTH
Average household
€439
ISLANDS
ITALIANS
€410
€441
Average household
Average household
FOREIGNERS
Average household
€347
Source Istat
ENTREPRENEURS
AND PROFESSIONALS
JOB SEEKERS
Average household
PENSIONERS
Average household
Average household
€503
€382
€426
Source Istat
65
Annual Report 15 For people and the community
For refuelling
Even a full tank of fuel, guaranteeing
an instant saving, becomes a “saving”
tool for households who struggle to
make ends meet every month. With
this is mind, even as far back as 2005
against a very uncompetitive national
backdrop, Conad opened its first
independent petrol station in Gallicano
in Garfagnana, in the province of
Lucca. There are now 35 Conad brand
petrol stations (7 of which were opened
in 2015), spread primarily across
Emilia-Romagna, Tuscany, Piedmont
and Umbria.
Once again in 2015, Conad managed to
keep its prices below average, adopting
a strategy that combined a series of
factors, such as a short supply chain,
66
direct control for shareholders over
petrol station management and the
sole use of self-service. All of which
guaranteed strict, ongoing controls
that meant we could offer customers
safe, high-quality fuel.
The monthly average cost of refuelling
at a Conad station in 2015 was €127,
compared with the Italian average
of €136 (this comparison has been
made based on the average monthly
prices published on the website of the
Ministry of Development).
It is estimated that over 10 years,
drivers who filled up with Conad saved
on average 8.8 cents per litre of fuel:
equating to a lower outlay for Italian
households of €103.8 million.
MONTHLY FUEL
EXPENDITURE
2015
2014
€127
CONAD STATION
USER MONTHLY
AVERAGE
€136
ITALIAN USER
MONTHLY
AVERAGE
2005-2015
€144
AVERAGE SAVING
CONAD STATION
CONAD STATION
USER MONTHLY
AVERAGE
€153
-8.8
CENTS/LITRE
ITALIAN USER
MONTHLY
AVERAGE
Comparison based on the average monthly prices published on the website of the Ministry of Development.
FUEL PLANT LOCATIONS
7
NEW PLANTS
IN 2015
Altopascio (Lucca)
Avezzano (L’Aquila)
Borgo San Dalmazzo (Cuneo)
Campiglia Marittima (Livorno)
Perugia
Ponte Felicino (Perugia)
Prato
2005 Gallicano (Lucca)
2007 Trentola Ducenta (Caserta)
2008 Carbonia (Carbonia Iglesias), Baggiovara (Modena)
2009 Pagani (Salerno)
2010 Faenza (Ravenna), Arma di Taggia (Imperia), Bibbiano (Reggio Emilia), Savigliano (Cuneo), Porto Torres (Sassari)
2 01 1 Bracciano (Rome), Livorno Ferraris (Vercelli), Ferrara
2012 Corciano (Perugia), Cesena (Forlì-Cesena), Lauria (Potenza), Donoratico (Livorno)
2013 Lari (Pisa), Lucca, L’Aquila, Azzano X (Pordenone), Giugliano in Campania (Napoli), Pavullo nel Frignano (Modena)
2014 Grosseto, Ivrea (Turin), Gualdo Tadino (Perugia), Porcia (Pordenone), Imola (Bologna)
67
Annual Report 15 For people and the community
For buying medicines
Conad also helps households save
money with the price of its OTC and
non-prescription medicines: i.e. any
medicines which, since 2006, could
also be sold at parapharmacies.
The Conad network has 101
parapharmacies spread across
16 Italian regions in the chain’s
supermarkets (78) and hypermarkets
(23), located in separate marked out
areas in line with existing legislation.
350 professional pharmacists work
in Conad parapharmacies (2.5 on
average per point of sale), which mean
that customers can safely purchase
prescription-free medicines and
health products while they do their
shopping, thereby saving precious
time and cutting costs. Indeed, anyone
who chooses a parapharmacy can
rely on advice and assistance from
professionals with the same degree
and the same qualifications as their
counterparts working in traditional
pharmacies, with just one difference:
parapharmacy pharmacists may
not sell prescription-only medicines,
not because they are not suitably
qualified, but because the law only
allows traditional pharmacies to
dispense prescription medicines,
including non-refundable medicines.
Yet parapharmacies also have very
clear responsibilities in terms of
supervision of medicinal products.
Indeed, they must meet the structural,
technological and organisational
requirements laid down by law
(Ministerial Decree of 9 March 2012).
In terms of its parapharmacies,
Conad’s commercial policy offers
discounts between 15% and
40% on medicines and 5% on
parapharmaceuticals, with an average
saving of over 20% compared with
traditional pharmacies.
68
In 2015, about 4.5 million customers
took advantage of these offers at
a total cost of €70 million and an
estimated saving of €12 million.
This cost-cutting policy not only affects
non-prescription and OTC medicines,
which are worth 30% of turnover,
but also the entire range of 4,000
products, including homeopathic
and veterinary products with or
without prescriptions, personal care
products, supplements and natural
remedies. Once again in 2015, the
entire non-medicine range was subject
to extensive promotions, including
discount coupons, flyers and special
offers.
If liberalisation was extended to
cover all medicines sold to citizens,
including prescription-only medicines,
it would trigger dynamic pricing that
would benefit the patient/consumer,
as underlined several times by the
Antitrust. Estimates indicate that it
would save between 450 and 890
million Euros a year, with benefits for
the pricing of all other prescriptionfree medicines already sold outside
pharmacies. Conad has calculated
that by selling class C prescription
medicines in its parapharmacies, it
would lead to a further saving for its
customers of over €3 million a year.
The Movimento Nazionale Liberi
Farmacisti estimates that deregulation
would create 5,000 new jobs,
3,000/3,500 new companies and
€700 million in investment. All of
which would cost the Italian State and
National Health System nothing.
The Liberalizziamoci campaign took
off in October 2015 behind this drive –
launched by Conad and joined by the
Federazione Nazionale Parafarmacie
Italiane and the Altroconsumo
Association – which set up a petition to
Annual Report 15 For people and the community
raise awareness in favour of the sale of
class C medicines in parapharmacies.
It was submitted to the Prime Minister,
Matteo Renzi, and to the Ministers of
Health and Economic Development.
By May 2016, it had collected over
150,000 signatures and counting.
The three promoters have announced
that, even though the point on class
C medicines was amended in the
Competition Bill, this joint initiative
would go ahead.
CONAD PARAPHARMACIES
DISCOUNT
ON NONPRESCRIPTION
AND OTC
MEDICINES
DISCOUNT ON
PARAPHARMACIES
-5%
AVERAGE SAVING
COMPARED WITH
PHARMACIES
-20%
-15%
-40%
ALTROCONSUMO:
AVERAGE SAVING OF
14% IN SUPERMARKET
PARAPHARMACIES
Pharmacy prices
Parapharmacy prices
Supermarket parapharmacy prices
According to the Altroconsumo
magazine, which continuously
monitored the prices of 70 of the
most common non-prescription and +10%
OTC medicines from 2006 to 2013,
the liberalisation introduced in
2006 had a stabilising effect: while
in the ten years prior to the Bersani
reform the average increase
was 35%, after the first drastic
-10%
reduction, prices were largely kept
below the rate of inflation across
all channels. The cheapest were in
-20%
the supermarket parapharmacy
channel, where there was a saving
of 14% compared with other stores.
LIBERALISATION
2005
2006
2007
2008
2009
2010
2011
2012
2013
69
Annual Report 15 For people and the community
For lenses
and glasses
Among the expenditure items that worry
Italians, buying lenses and glasses is by
no means insignificant, partly because
usually more than one family member in
a household needs them.
Conad is also making a solid
commitment in this respect: its
Opticians stores – found in 20 of the
chain’s hypermarkets and superstores
from Piedmont to Sicily – were set up
to offer customers the highest level of
professionalism and the best offers
at affordable prices. In fact, at Conad
Opticians, a pair of glasses complete
with lenses is available from €29.90,
while sunglasses are on sale from €49
or with a 20% discount all year round for
CONAD OPTICIANS
5
NEW OPTICIAN STORES
IN 2015
Cagliari
Grosseto
Palermo (cc Guadagna)
S. Stefano Magra (SP)
Trezzo d’Adda (MI)
Alba (CN)
Bologna
Capriolo (BS)
Castelvetrano (TP)
Corciano (PG)
70
Forlì
Lecce
Modena
Palermo (cc Leoni)
Rimini
Savigliano (CN)
Teramo
Torino
Villaseta (AG)
Viterbo
big-name brands.
Thanks to the qualified staff, customers
can have their eyesight tested and get
advice on the best solutions.
You can choose from over 800 glasses
and sunglasses at competitive prices,
partly thanks to promotions that have
been very popular among customers.
In fact, while the market has generally
recorded a sharp decline in the sale
of sunglasses, Opticians in the Conad
network have more than offset this fall,
registering an increase in sunglasses and
in customer numbers generally. In 2015,
till receipts rose by +5% compared with
2014, with 8% growth in the number of
items sold.
Annual Report 15 For people and the community
Conad and its relationship with the customer
An issue
of loyalty
The Conad system has set itself the
goal of being able to rely on loyal
customers, who see the store as their
go-to place for their daily shopping
due to its reliability, proximity, genuine
convenience and the quality of its
fresh products. The numbers show
this goal has been achieved: today, the
brand has a regular customer base
of 7.9 million households, i.e. 31.7%
of the Italian population. The figures
become even more meaningful when
we consider that there are 52 weeks
in a year and that – according to GFK
Eurisko consumer data – the average
number of till receipts per household
in the Conad network rose to 46.2
in 2015 (+1.2 compared with 2014).
But that’s not all: over 70% of the
network’s turnover was generated by
customers who use the Conad loyalty
card, with a growing trend and an
average till receipt double the value of
the occasional shopper.
But who is the Conad customer? The
available data shows a cross-cutting
audience, which covers all ages and
social classes: 34.5% of customers
are under 44 and 28.8% are over 64;
74.3% do not have small children
72
and 25.7% are part of a large family
(with 4 or more members). In terms of
income, all sectors are relatively evenly
covered, with a prevalence among
people who see themselves in the
middle income bracket (33.8%). One of
the hallmarks of the Conad customer is
the high number of large families with
an average income, where the person
in charge of the shopping (the loyalty
card holder) is young and educated.
But we know that it is the “middle
class”, along with the poorer sections
of the population, who were hit hardest
by the crisis. National surveys show
that “in 2006, 60% of Italians said
they were middle class, while now only
41% say the same thing”. In the last 10
years, this section of the population –
which seems to be getting gradually
poorer – has significantly changed its
consumption, health and education
standards. This is why Conad has
been focusing its efforts for a long
time on setting up initiatives – such as
“Bassi&Fissi”, but also its campaign
to liberalise medicines for citizens and
many others – which all have the same
goal: to improve the purchasing power
of its customers.
Annual Report 15 For people and the community
Information
tools
In order to provide information and
to create a dialogue with customers,
Conad has adopted a multichannel
system that takes full advantage of the
possibilities offered by new forms of
interactive communication.
Customers in the new millennium look
for information online on what they
are buying much more now than in the
past, comparing prices and hunting
for clues that will let them assess the
quality of products, but they also focus
on dealing directly with companies.
To meet these new needs, in 2014,
the company website was given a
makeover, now appearing as a virtual
window on Conad’s world and visited
every day by customers, as we can
see from the browsing data. In 2015,
Conad.it received over 9.5 million
visits, 52% of which were from new
visitors, with an average stay of 2.38
minutes and 31.6 million pages viewed.
Once again in 2015, Conad launched
other sites linked to special initiatives,
including liberalizziamoci.it for the
promotion and online management of its
petition to liberalise class C medicines,
amicheperlapelle.it for the photo
contest held to mark the launch of the
Naturaline cosmetics range, as well as
festeggiamoinsieme.conad.it where you
can gather and share ideas and advice
on any celebrations at home. These
are joined by its specific sites already
running for a few years now, such as
conadjazzcontest.it for the contest of
the same name aimed at young jazz
musicians and insiemeperlascuola.it
where you can get information on
initiatives to support public schools.
On the social network side, it is
worth mentioning the engagement
activities linked to the long-standing
print magazine, Bene Insieme, which
is still distributed every month at all
network stores with a circulation of
over 900,000 copies. The Conad
Bene Insieme Facebook page is the
quintessential virtual interface for fans
of the Conad world, who increased by
46% between 2014 and 2015, reaching
320,000 people and making over
190,000 interactions (475 for every
1,000 fans), 168,000 likes, 17,000
comments and 25,066 shares, with
20% growth on the previous year.
The page managed to direct 138,000
hits to Conad sites, making a strong
contribution to the launch of the tutorial
site festeggiamoinsieme.conad.it.
The Conad App has also achieved
excellent results, which keeps
customers continuously updated
about any initiatives running and new
services offered. In 2015, following the
registration of 77,000 new users (at
a monthly average of 6,328), Conad
achieved its goal of 430,000 users
and 650,000 hits on its services.
Internet traffic analysis shows that
many customers use the app as a way
of getting information before they go
shopping: the most viewed pages are
on promotions (45%), followed by
pages displaying customers’ loyalty
card account statement (12%).
Finally, we should look at the newsletter
numbers, a now “historical”digital
communication tool, whose efficiency
has widely been reassessed: 259
editions in 2015 and 18 million sent
by the Consortium or by individual
cooperatives.
73
Annual Report 15 For people and the community
Investments
in communication
Recognition
and reputation
Over the past year, in a general
framework of gradual decline in
advertising investments, Conad
continued to focus on communication,
confirming its position as the largest
investor in the major retail sector.
From 2003 to date, the brand’s
advertising budget rose by 300%,
reaching €36 million in 2015 and
accounting for a share of voice of
46.1%, which increasingly distances it
from its competitors. One only needs
to think that Lidl’s advertising weight
barely reaches 33.1% and chains such
as Coop and Carrefour respectively
hold 11.7 and 5.8%.
The efforts made in terms of
communication have been rewarded.
Once again in 2015, the Conad brand
had the highest overall recognition
(spontaneous + prompted): accounting
for 89.6% of the Italian population, a
higher percentage than the market
leader (source: GfK).
However, recognition does not
necessarily equate to reputation. To
find out what Italians think we need to
measure brand equity, i.e. the brand
value from consumer perception.
The research conducted by Cfi Group
International is clear: the marks
awarded by interviewees to Conad
are higher than the market average
for all items analysed. The resulting
brand profile is characterised by
transparency (according to 71.9%
of interviewees), professionalism
and rigour (72.2%) and a focus on
consumer needs (71.6%).
Customer satisfaction has also
increased: according to the same
research, from 2012 to 2015, its
customer satisfaction index rose by
+1.4%, lifting its figure to 75.5% and
giving Conad second place behind
Esselunga (which holds 76.4%).
OVERALL RECOGNITION
CONAD
89.6
COOP/IPERCOOP
LIDL
CARREFOUR
EUROSPIN
AUCHAN
ESSELUNGA
SMA
89.0
85.7
78.3
76.3
70.2
49.8
49.1
Source Gfk
74
INVESTMENT IN
COMMUNICATION
THOUSAND EUROS
36,000
2015
35,500
2014
35,000
2013
34,000
2012
33,000
2011
31 ,500
2010
29,964
2009
29,295
2008
29,220
2007
22,600
2006
17,000
2005
11,000
2004
Source Nasa
SHARE
OF VOICE
0.8%
AUCHAN
2.2%
SIGMA
5.8%
CARREFOUR
33.1%
LIDL
11.7%
COOP
46.1%
CONAD
Source Nasa
75
Annual Report 15 For people and the community
Conad and the quality of its products
The quality and safety
of the Conad brand
Carefully selected, GMO-free,
high-quality fresh packaged Italian
products. These are the hallmarks of
the Conad brand’s range of products:
2,629 products, which stand out
not only in terms of their quality and
convenience, but also in their safety.
To maintain this commitment – and
the valuable trust built up over time
– Conad runs checks not just on its
finished products but throughout every
stage of the production chain.
Every brand product supplier is
selected through a complex auditing
process, which takes several months’
work. Once this stage is over, a
contract is agreed covering strict
supply specifications. Conad regularly
checks compliance with these
specifications, which is essential to
maintain the commercial relationship.
In 2015, 7,456 samples were taken,
628,977 analyses were conducted
(603,156 in 2014) and 2,322
inspections took place, for a total
investment of about €3.4 million, a rise
of 4% compared with 2014 and a twofold increase over the last ten years.
76
The inspections took place at network
stores and distribution centres but,
above all, at brand product suppliers,
with inspections conducted at 915
production plants and farms, thus
tracing back to the source of the
production chain. At the end of every
inspection, the supplier is given a
rating between 1 (the highest) and 5
(the lowest).
In 2015, the average value was 2.11
points, but it is worth noting that 47%
of supplier companies obtained the
highest grade (1).
In 2015, Conad invested €1.4 million
in laboratory analysis conducted on
finished products, primarily directed
at checking brand products, with
an average outlay of €186.77 per
sample. If a product did not comply
with the established parameters, the
entire production lot was immediately
withdrawn from the whole network. In
2015, 45 withdrawals were ordered.
There is a form on the conad.it website
for customers to fill out to file a
complaint or report any non-compliant
product or service.
QUALITATIVE ANALYSIS
628 ,97 7
2015
603, 1 56
2014
505,922
2013
4 8 3,01 8
2012
4 7 7, 7 5 3
2011
4 0 9, 51 5
2010
397, 2 4 2
2009
3 3 4 , 4 17
2008
313,195
2007
308,446
2006
QUALITY AND SAFETY
THE NUMBERS
2010
2011
2012
ANALYSIS CONDUCTED 409,515
ANALYSIS CONDUCTED 477,753
ANALYSIS CONDUCTED 483,018
SAMPLES TAKEN
6,149
SAMPLES TAKEN
7,388
SAMPLES TAKEN
7,398
INSPECTIONS
1,919
INSPECTIONS
1,801
INSPECTIONS
1,877
FACTORIES
706
FACTORIES
734
FACTORIES
778
2013
2014
2015
ANALYSIS CONDUCTED 505,922
ANALYSIS CONDUCTED 603,156
ANALYSIS CONDUCTED 628,977
SAMPLES TAKEN
6,575
SAMPLES TAKEN
7,700
SAMPLES TAKEN
7,456
INSPECTIONS
1,819
INSPECTIONS
2,031
INSPECTIONS
2,322
FACTORIES
773
FACTORIES
820
FACTORIES
915
77
Annual Report 15 For people and the community
78
The importance
of the label
Personalised range
of products
European Regulation No. 1169/2011
came into force on 13 December 2014,
which waives the requirement to
indicate the location and name of the
producer on the label of supermarket
“brand products”. Conad publicly
opposed the introduction of this
regulation, since it is detrimental to the
consumer, and has continued to print
information on its production facilities
on its packaging, providing customers
with guarantees above and beyond
legal requirements.
A growing number of consumers have
specific nutritional requirements,
which merit a personalised service.
This is why AC Alimentum Conad was
developed: 48 products made with
functional ingredients or free from
certain harmful elements for particular
groups of people.
AC Alimentum is organised into various
sub-categories: the Cuore line, for
example, includes products designed
to help control blood cholesterol levels;
while Regolarità ed Equilibio promotes
healthy intestines; last but not least,
Difesa is designed for people who
want to boost their natural defences.
These are joined by products designed
for real intolerances, such as Senza
Glutine for celiac disease sufferers and
Alta Digeribilità for people who cannot
digest lactose. Conad has created
personalised products for these
specific nutritional profiles.
Annual Report 15 For people and the community
Brand products
and the environment
Respecting the environment means
safeguarding a common asset and
making a commitment – for future
generations – on several levels,
including by offering green products.
Indeed, all Conad brand products
contain no ingredients from genetically
modified organisms. But that’s not
all. For some time, the brand has
been developing a line – Conad il
Biologico – which now includes 68
products from certified organic
farms, or that are produced using
a method that guarantees respect
for natural cycles, soil health, water,
plants and animals, while using energy
and other resources responsibly.
This method only allows the use of
naturally occurring substances and
bans the use of synthetic chemicals,
such as insecticides, herbicides and
fertilisers, guaranteeing the well-being
of the consumer and the environment.
Several products from the Conad
il Biologico line have also obtained
Fairtrade independent certification,
which ensures that ingredients are
grown and sold in respect of the rights
of producers and workers in the South
and that they are paid a fair, steady
price.
This commitment to sustainable
production does not just include food.
In 2015, Conad exclusively added a new
line of completely green products for
the face, body and hair to its Naturaline
range, combining advanced cosmetic
research, natural ingredients and a
more than affordable price. These 21
beauty products made in Switzerland
are characterised by their natural, highquality ingredients (98.5% of plant
origin, 50% from organic farming),
selected and certified by Ecocert, and
which stand out due to their long list
of completely banned substances,
such as colourings, mineral oilbased products, silicone, parabens,
paraffin, GMOs, phenoxyethanol and
nanoparticles.
Strictly organic farmed milk and honey
are the only ingredients of animal
origin.
79
Annual Report 15 For people and the community
Shared
values
There is a point where corporate
social responsibility meets
marketing, without losing, rather
even strengthening, its own social
worth. This is known as cause-related
marketing, a tool used to help shift
consumers’ choices to equal priced
products that support good causes.
Conad is using this tool more and
more often, aiming not only to create
social value, but also to share it with
its own customers, increasing the
effectiveness of pro-bono work for
common causes.
There are so many initiatives –
described over the following chapters
– from “Insieme per la Scuola”
to “I cuccioli del cuore”, up to the
distribution of bracelets made by
inmates.
80
Annual Report 15 For people and the community
Conad with regional businesses
The tricolour
strategy
Brand product
suppliers
Conad has made the promotion of
Italian agri-food heritage a fundamental
part of its company mission and,
boosted by impressive sales volumes
and 3,055 stores spread all across
the region, it offers solid support for
national production.
All relationships with suppliers are
governed by contracts, which can
be: national (agreed by the Conad
consortium for all cooperatives),
local (signed directly by individual
cooperatives, primarily for small
supplies in the area), or linked to the
production of Conad brand products.
The policy to support Italian production
cuts across all three areas, but it really
comes to the fore in the brand products
offered, using a meticulous supplier
selection process and more detailed
and stringent specifications.
In fact, Margherita now has Italian
links: 95% of its fruit and vegetables
come from Italy, its milk and dairy
supply chain is Italian, so are its tinned
tomatoes and other vegetables, as
well as all 247 products from the
Sapori&Dintorni premier line.
Another important aspect is the
administrative side: Conad makes
100% of its payments to suppliers
within the agreed terms.
While it is true that respecting
deadlines must be a prerequisite,
it is also true that not having any
deferrals during hard times, such as
the long economic crisis, has been
“the exception” rather than “the rule”.
Fulfilling its commitments, Conad has
guaranteed stability for small, medium
and large-sized upstream industries,
which has made the difference allowing
many businesses to look to the future.
For its brand products, in 2015, Conad
drew from a pool of suppliers of 609
Italian businesses. They include 351
companies that produce consumer
packaged goods (packaged foods and
drinks, oils, frozen foods, packaged
non-food products, etc), while another
240 supply very fresh foods (such
as meat, fish or fruit and vegetables)
and 18 provide goods from other
categories; they are joined by another
26 companies that manufacture
consumables.
A significant portion of supplies is
reserved for small and mediumsized local businesses, with the dual
objective of promoting typical regional
products and supporting the local
economies where the brand operates.
This commitment comes to life on two
levels: the Sapori&Dintorni line, which
covers a unique offer of outstanding
Italian food and wine produced by small
artisan companies, as well as local
purchases made directly by regional
cooperatives and by local operators.
81
Annual Report 15 For people and the community
Sapori&Dintorni
sheer excellence
The Conad Sapori&Dintorni brand
plays a prominent role in promoting
typical local products. It was created
specifically to promote Italian
specialities: high-quality products
made using traditional methods and
purely local ingredients.
S&D currently offers 247 products
ranging from Coppa Piacentina to
Prosciutto di Norcia, from Neapolitan
conchiglioni pasta to Apulian cavatelli
pasta, and even including tomato
passata, Modena balsamic vinegar and
Ligurian extra-virgin olive oil.
The brand is a symbol of flavour
from 19 Italian regions (only Molise
is missing), but it is Emilia-Romagna
with 58 products that is the main
contributing region to this range of
excellence, followed by Campania (24),
Piedmont (15), Apulia (16), Sicily (14),
Tuscany (13) and Trentino Alto Adige
(13). An important role is attributed
to designation of origin production,
which has involved quintessentially
traditional small and medium-sized
businesses for generations as the
symbol of Made in Italy excellence.
Over 71 products are supplied with the
PDO label, while 27 bear the PGI stamp.
Thanks to the Conad network, the sale
of PDO products alone totalled almost
€61 million in 2015, while PGI products
achieved €7.5 million.
Collectively, the Sapori&Dintorni line
grew again by 12% across the whole
network in 2015 to the benefit of local
economies, the promotion of the Made
in Italy label and customers, who can
buy the best Italian food and wine at
affordable prices all across the country.
The outlet offered to typical local
products goes beyond national
borders. The “Creazioni d’Italia” line,
designed for the foreign market, is
distributed by Conad through its
network of European partners. In
2015, 4,639 quintals of high-quality
Italian food products were stocked
on supermarket shelves in the main
countries, expanding the business of
small local producers and bringing
the taste of Italy to the table of new
consumers.
83
Annual Report 15 For people and the community
Cooperative
local suppliers
During the year under review,
5,873 local suppliers were used by
cooperatives for a total turnover of
€1.8 billion: these considerable satellite
activities benefit the communities and
economies in the individual regions.
The Pac 2000A cooperative has the
most local businesses (2,252), followed
by Conad Tyrrhenian (1,150), Conad
Adriatic (725) and other regional
businesses with lower numbers.
The entire Conad system is committed
to supporting the local economic fabric,
which also lets it offer the brand’s
customers increasingly popular regional
products.
84
Annual Report 15 For people and the community
Conad for development and employment
Conad’s daily life are the thousands
of customers with whom it comes
into contact and must guarantee
availability and services. Its most
direct link are the employees who
work in its sales network, with their
wealth of professional experience,
know-how and expertise. Conad
focuses its resources and attention on
them. When a region is able to attract
businesses that know how to promote
and develop, Conad invests resources
to set up new stores and, therefore, to
create new jobs. Then for every new
job at its stores, others are created
in different sectors, fuelling local
satellite activities. But that’s not all:
working on regional excellence, in turn,
improves communities’ well-being.
Conad’s cooperative business model
helps enhance every human resource,
producing quality of work and life and
a use of the region that respect the
needs of local communities. Italy has
the unenviable record of the highest
youth unemployment. Yet one only
has to enter a Conad store to realise
the average age of its employees: they
are young, if not very young. They are
trained by colleagues and entrepreneur
shareholders with greater experience
and seniority at work who are willing
to tutor the new generations, to help
them grow, to ensure a future for many
families, and to guarantee that the
entire Conad system has optimum
opportunities for development.
Last year, against a backdrop still
marked by the economic crisis and by
unemployment (particularly among
youths), Conad created – and in certain
cases kept on – 2,126 jobs, investing
€289 million in the development of its
network, which grew to 3,055 stores
that can meet every shopping need. In
2016, the opening of 88 new stores for
a total investment of €188 million will
guarantee work for 1,300 employees,
800 of whom will be new recruits and
the rest will be internal recruitment.
In areas with the worst unemployment,
Conad has an attractive appeal
for the best local business powers
and is a driving force for work and
development. It invests economic
resources, fuels local satellite activities
and gives part of the economic wealth
which comes from footfall in its stores
back to the region and its communities.
85
Annual Report 15 For people and the community
Conad and the community
86
Being a community
For schools
“Corporate citizenship” for Conad
is not a strategic option pursued by
management as part of its corporate
social responsibility policies. It is a
distinctive part of the Conad system’s
DNA for one very simple reason:
Conad is an organisation of associate
retailers, who run their own stores.
Conad shareholders are an integral
part of their communities because
in many cases they grew up in the
village or city where they work, and
their children go to the same schools
and sports clubs as their customers’
children. They understand regional
problems, difficulties at school and
with elderly services, as well as the
commitment of local associations
promoting social, sporting and
humanitarian issues. Hence they
support many local sports and nonprofit associations. Conad does not
sponsor first teams, but rather youth
squads.
It is a far cry from major sporting
events, but it is there for many minor
sports. It supports major organisations
and national non-profit associations
but, above all, it backs hundreds of
small local causes that are essential for
the quality of life in the region and for
the development of solidarity-based
citizenship. This is Conad’s world and it
has always been so.
In 2015, the Consortium gave local
communities €22.8 million, along with
€6 million for sports clubs. The money
is used to fund many initiatives for just
as many good causes.
Magnetic boards, webcams, printers
and cartridges, PCs and notebooks: all
this is essential school equipment for
the 21st century. But unfortunately,
state schools, and sometimes even
private schools, do not have sufficient
resources. Yet today more than ever,
to train new generations we need to
involve students and encourage their
enjoyment of reading and learning. By
intercepting these needs, Conad has set
up successful cause-related marketing
initiatives, such as “Insieme per la
scuola”, “Scrittori di Classe” and many
others.
Insieme per la Scuola
and Scrittori di classe
Now in its fourth year, “Insieme
per la scuola” has so far provided
Italian schools with 70,000 pieces
of teaching equipment for a total of
€13 million. This has been achieved
by involving thousands of people,
including children, families and
institutions, using a very simple
mechanism: for every €15 spent,
customers were offered a pack of
stickers containing a school voucher
to give to their school. Individual
schools could use the vouchers
collected to get free equipment as
shown in the initiative’s catalogue. All
the regional cooperatives played an
active part. In 2015, Emilia-Romagna
was once again the most active
region with 4,083 registered schools,
followed by Lazio (2,694 schools) and
Tuscany (2,130 schools). Collectively
during the year under review, 17,362
tools were given out – primarily
computers and multimedia tools,
such as PCs, notebooks, printers,
webcams, projectors, etc – as
requested by 9,217 schools.
Since 2014, the “Insieme per la
Scuola” project has been supported
by “Scrittori di classe”, an initiative
designed by Conad and set up
together with some of the most
famous children’s authors, involving
primary and lower secondary school
Annual Report 15 For people and the community
classes in a writing contest. The goal
here is to promote a love of writing
among young people and to stimulate
teamwork among classmates and
teachers. 12,942 classes registered
for the 2015 contest, involving a total
of 4,000 schools and 5,854 stories
published on the special website.
In the meantime, the eight stories
which won the 2014 contest are now
part of the first collection, which has
sold over 3.5 million copies to date all
across Italy.
Resto al Sud: a project against
school drop-outs
Another initiative for schools under
the Margherita brand is its support for
the Resto al Sud Academy, a cultural
project which aims to encourage
training for talented youngsters from
southern Italy, living in areas at high
risk of hardship. Six young people
took part in the first edition from the
districts of Scampia (Naples), Librino
(Catania), Zen (Palermo), Tamburi
(Taranto) and from the area of Sulcis
(Carbonia). These six “digital talents”
were offered ten-month grants, so they
could pursue their future jobs. Conad
also awarded a digital grant to a young
person from L’Aquila living in the Case
project, an area that accommodates
several families hit by the 2009
earthquake.
Support for buying textbooks
Buying textbooks for the new school
year is an outgoing that always has
a considerable impact on household
budgets. Thanks to promotional
initiatives set up in 2015, Conad has
helped its customers save €3.3 million.
Indeed, Conad has strengthened its
now regular promotion on textbooks
and customers who bought school
books at the chain’s stores enjoyed
a 20% discount on the cover price
and 25% if they had a loyalty card.
Conad Centre North cooperatives,
Independent Associate Retailers
and Nordiconad all took part in the
campaign.
87
Annual Report 15 For people and the community
For culture
Umbria Jazz
and the Conad Jazz Contest
Conad is the main sponsor of Umbria
Jazz, an international jazz festival it
has collaborated on for ten years as of
2015. Alongside its financial support,
Conad ensures active participation,
developing side initiatives such as the
Conad Jazz Contest, which celebrated
its fourth year in 2015, and the “Invito
a Umbria Jazz” tour, which brings over
a hundred national stakeholders to
the city during the festival, while also
involving them in meetings with local
actors.
The contest was set up to create
opportunities for new generations of
jazz musicians, who are struggling
to break into a music scene where
it is increasingly difficult to make a
name for yourself. Once again last
year, the Conad Jazz Contest created
the opportunity for over 500 young
musicians to present their work,
offering ten winning groups a chance
to play on the prestigious stage.
The top three in 2015 played during
the final weekend of the Festival,
bang in the centre of town in Piazza
IV Novembre, while the other seven
groups selected starred on the now
legendary Conad Stage over the
preceding days.
Conad seized the opportunity of
Umbria Jazz to organise another
solidarity-based initiative. For the third
year running, it promoted the “Jazz
per la solidarietà” match in Perugia,
which saw the Italian national jazz
team, the ItalianAttori and the All Star
DJs take to the field in a triangular
football tournament. This charity
event was supported by a huge free
concert featuring the stars who played
on the pitch.
The proceeds were donated to
seven associations and non-profit
organisations that work throughout
Umbria.
88
Il Grande Viaggio
Italy’s squares, real Italy with its local
communities. In 2015, Conad decided
it wanted to meet people outside its
stores, to talk about regional problems,
development, sustainability and the
future. Thus Il Grande Viaggio was set
up, a grand tour beginning in spring
2015 when “Margherita” stopped
for six weekends in six small towns:
Cosenza, Pescara, Parma, Alba,
Grosseto and Treviso. The location
in all these venues was the agora,
the square, the quintessential place
of democracy and sharing. Meetings
and debates, as well as music and
games brought Il Grande Viaggio to
life all throughout its “journey”: 5,100
kilometres travelled, 12,000 people
involved and 51 guests gathered from
the world of institutions, culture,
business and associations. Once
again, the stars of the show were the
communities and the people.
Cous Cous Fest
The scents and flavours of the
Mediterranean in harmony with the
cultural integration and meeting of
different people: this is the spirit of
Cous Cous Fest in San Vito Lo Capo,
in the province of Trapani, now in its
eighteenth year. For the fifth year
running, Conad was the main sponsor
of the festival, which increasingly
serves as a bridge between different
countries and cultures, packed with
events and exploration, as well as
unmissable gastronomic events.
The festival explores issues that are
now part of the daily life and past of
many people: immigration, market
globalisation, information and culture,
as well as the resurfacing in European
societies and in the western world
of new forms of racism that make
intolerance and the refusal of anything
“different” the sole reason for their
existence.
Annual Report 15 For people and the community
For minor sports
In 2015, Conad invested €6 million
in sport, providing support for 1,022
sports clubs and over 71,500 athletes,
thereby directly involving 50,000
people at various levels and in different
activities.
In line with Conad’s vision, its
resources have not been channelled
into disciplines that enjoy the spotlight,
big clubs or teams that play in the top
leagues, but rather they have all been
invested for the growth of amateur
clubs, to give a hand to multi-sports
centres or to support children’s and
juniors’ activities. In short, to promote
sport as a lifestyle and a reason for
getting together. The largest tranche
of funds for sports clubs went to youth
sectors, with the goal of bringing new
generations closer to sports that do
not live on fan support or unbridled
competitiveness but rather on play, fun
and healthy competition.
In the shadow of the bell towers
The entrepreneur shareholders in
the Conad network are immersed in
life where they work. It is therefore
natural that investments are made on
the ground, from time to time, to meet
the precise needs of a certain district,
or to improve the living conditions of
a region. There were hundreds of this
type of initiative in 2015. Volleyball,
cycling and football are the most
commonly sponsored sports, but not
to forget the rest: from track and field
to ice skating, from dance to karate,
from basketball to swimming, from
rugby to handball, and even fishing,
sailing and judo.
Where champions are born
There are certain stories which, better
than any others, can describe Conad’s
sense of commitment to “minor
sports”. Epitomising this is Scherma
Modica, which Conad has supported
for over twenty years. A club which
boasts the foil fencer Giorgio Avola
among its pupils: 27 years old and a
record to make many green with envy:
nine World Cup podium finishes, a
European title, a World bronze and an
Olympic team gold. Another exemplary
story is the Zebre Rugby team from
Reggio Emilia, which plays in the Pro12
and certain European competitions
such as the Challenge Cup. Needless
to add, football is included, where
Conad plays a leading role with the
Costa Gaia-Conad Cup youth football
tournament, while also sponsoring
Ac Fiorentina. Suffice to say fans will
not have missed its sponsorship of
Pallacanestro Trapani: since August
2015, Margherita has appeared on the
shirts of this legendary team that plays
in Serie A2, under an initiative linked to
a development project that involves the
entire city and its basketball tradition.
Other activities
Once again in 2015, Conad ensured
active participation in amateur
events that promote sport’s most
precious values and involve citizens
of all ages and entire families. The
most important events include the
legendary Rome Marathon, the Naples
International Marathon, the Florence
Marathon, the Ravenna International
Marathon and the Fisherman’s Friends
Strong Run. The brand attended these
events with stands and refreshment
points.
Among the little known initiatives,
but no less important, we have the
Maratona dles Dolomites cycling
race and the Campus Rugby
Mauro Bergamasco; the latter is a
psychophysical training and socialising
project for children aged 10 to 15.
91
Annual Report 15 For people and the community
For scientific research
and health
Big hearts, 11 and 40 grams
In 2015, the paediatric cardiology
surgical department of the Bambino
Gesù Hospital in Rome set up the
“Un cuore nuovo” project, thanks to a
donation of €861,628 it received through
one of the many cause-related marketing
initiatives promoted by Conad.
This substantial sum, raised through
the involvement of over 300,000
customers, was used to make two
artificial paediatric hearts weighing
11 and 40 grams, which let two young
patients be discharged, so they
could wait for a human heart from a
donor at home. The project will also
subsequently help trial cell therapy
for myocardial regeneration, which
will use stem cells. The Umberto I
Polyclinic and the Sacro Cuore Catholic
University in Rome will also take part in
this second phase.
The Biobank
Another area that has seen Conad
shareholders actively engaged as
always is the fight against cancer.
Indeed, once again in 2015, the threeyear project 2014-16 continued to
run, promoted by the Independent
Associate Retailers cooperative and set
up to create the Meldola IRST-IRCCS
Institute Biobank (Forlì-Cesena). The
purpose of the Biobank is to collect
and store human biological materials
92
(tissue, blood, DNA, isolated cells or
other material) donated by patients
with cancer for research purposes.
Health books and foods
Correct information on health issues
is of paramount importance for
preventing and treating diseases.
This is why Conad wanted its work to
include editorial initiatives aimed at
increasing information, knowledge and
awareness.
Together with the Umberto Veronesi
Foundation, it published the “Libertà di
sapere, libertà di scegliere” collection,
a series of pamphlets developed with
scientific advice from academics,
which tackle the issues people most
frequently ask questions on, from
mineral water to breast cancer, from
vegetarianism to vaccinations, in order
to offer useful tools so they can make
informed decisions.
Still in terms of promoting health, it is
worth mentioning the sponsorship of
the “La Salute a tavola” initiative, which
the Independent Associate Retailers
carried out in collaboration with the
Romagnolo Oncology Institute.
From October to December 2015, at
the cooperative’s stores in Romagna,
Marche and the Republic of San
Marino, a little flag was used to identify
foods which contain useful properties
for preventing cancer.
Annual Report 15 For people and the community
For solidarity
With a series of national and local
initiatives developed from the close
collaboration between cooperatives,
shareholders and associations in the
region, Conad has played an active
part in supporting people in vulnerable
situations due to health or social
reasons. There is no pre-set work plan
in this area: resources are collected
and distributed when and where most
needed.
I cuccioli del cuore
The most successful charity fundraising initiatives include the “I cuccioli
del cuore” campaign run by Conad
Centre North, Conad Tyrrhenian and
Nordiconad.
Repeated in 2015 at the beginning of
the school year, it helped collect €1.5
million by selling stuffed animals (“baby
crocodiles”), with part of the proceeds
donated to charity. The various
recipients of the funds include patients
at the Paediatric Onco-Haematology
ward of the Pession-Paediatrics unit at
the Sant’Orsola-Malpighi Polyclinic in
Bologna, who can now also rely on “La
Casa Gialla”, a facility run by the Ageop
non-profit organisation, a few metres
from the Hospital, where workers and
volunteers look after six sick children
accompanied by their respective
families, all for free.
Last Minute Market
Its membership to Last Minute
Market is celebrating its tenth year, an
organisation that works all across the
country developing regional projects
aimed at salvaging unsold or unsellable
goods for charity.
Once again in 2015, the brand’s stores
launched their weekly collection of
products close to their expiry date
or with minor imperfections, but
with the same guaranteed safety as
those available on the shelves. By
avoiding waste, this initiative helps
many families experiencing difficult
conditions or stages of their life, who
are given food and other goods by
charitable associations under Last
Minute Market’s coordination.
Support for Ant
Among the most well-proven solidarity
campaigns, we should note the support
for Ant, an association which provides
free medical home care to cancer
patients. All 3,055 network stores
joined this campaign. As always, the
best time to raise funds was during
November and December, with the sale
of solidarity Christmas stars. In 2015,
over 245,000 plants were sold, raising
a total of €125,000 for Ant.
Women, violence and prison
What better time than the 8th March
to invite women to give material
support to other women? On
International Women’s Day 2015,
Conad handed out 380,000 bracelets
made by inmates under the “Made
in carcere” brand, with part of the
proceeds donated – for a total of
€90,000 – to female victims of
violence, through the DiRe - Donne in
rete contro la violenza association.
The initiative therefore achieved
two goals. On the one hand, it
supported the “Made in carcere”
rehabilitation project, which offers
inmates a training course aimed at
their final reintegration into working
and civil society, and on the other
hand, it provided real help to women
struggling to get out of the worst
prison: i.e. violence by their partners
or husbands, which is an endemic
plague in Italy.
La rosa solidale
Mother’s Day can also be an occasion
to give a hand to someone who needs
it. Throughout May 2015, “rose
solidali” were put on sale in Conad
stores. These roses are for people
to give to their mothers, while also
supporting the Don Mazzi Youth Centre
Foundation. The campaign has helped
hand out over 118,000 roses and
collect €50,000 for the Foundation.
93
Annual Report 15 For people and the community
Sant’Egidio
The collaboration with the Community
of Sant’Egidio has been running for
a long time and continued in 2015 by
providing everyday products for free
all year round – food and other goods
– to families who reach out to the
Community. The relationship with this
non-profit organisation, which helps
vulnerable people, is spearheaded by
Pac 2000A and the Consortium.
La spesa sospesa
A small jewel in Conad’s crown of
solidarity is the corporate matchedgiving initiative which runs in Abruzzo
94
and was founded by the generosity of
a Conad shareholder from Pescara:
“La spesa sospesa”. Similarly to
the more famous Neapolitan “caffè
sospeso”, before Easter and Christmas,
supermarket customers are invited to
buy food for someone they do not know:
a gesture of solidarity which is matched
by the store with another donation.
Following the end of the third edition
in March 2015, over 1,200 kg of food
had been collected, along with another
1,300 kg at the end of the year, all of
which was sent to the Abruzzo Food
Bank which distributed the food to
vulnerable people.
Annual Report 15 For people and the community
Conad and the environment
The environment and the community
are two closely connected concepts,
which have always represented the
main driving force for action for a
key stakeholder: future generations.
Something has now changed. While
up until some time ago protecting
the environment seemed to be a
“manifesto” commitment pledged
by institutions and businesses,
now, due to intensifying extreme
weather conditions scattered almost
everywhere, a new awareness has
taken hold in the life of citizens and
expressions such as climate change
and carbon footprint are now part
of our daily language. In 2015, the
Paris Climate Change Conference,
although overshadowed by the terrible
attacks in the city, nevertheless helped
raise positive awareness, starting a
countdown that combines both present
and future generations.
Environmental sustainability is
therefore a value which customers
are increasingly focusing on, guiding
their choices and giving preference to
brands which, like Conad, make a solid
commitment in this area.
Saving energy, recycling packaging
and waste, and lowering emissions:
these are issues which the Conad
Consortium, cooperatives and
entrepreneur shareholders have
long been committed to, either by
implementing sustainability policies
or by taking part in specific activities
linked to the communities where they
work, through their strong, reinforced
bond with the region.
New initiatives were set up throughout
2015, including a collaboration with
the specialist Green Router company,
aimed at measuring the environmental
footprint of the Conad supply chain
throughout every stage using a
systematic approach.
The study, which will be completed
in 2016, will add input to the new
distribution sustainability plan,
identifying areas for intervention
over the next few years. What sets
this project apart from previous ones
is its integrated vision: a gradual,
natural point of entry downstream
from environmental projects that up
until now had focused on individual
distribution sites or experimental
facilities.
At the same time, in 2015, Conad
brought forward its own energy and
environmental sustainability plan,
developed in line with Community
objectives: including ample scope for
renewable sources, the installation of
solar panels and the implementation
of the “Energia a km 0 Project” at
its platforms, a project aimed at
promoting the development of a
distributed energy generation model,
known as “dispersed power”.
Moreover, Conad is a member of
the Renewable Sources and Energy
Efficiency project, which involves the
redevelopment of stores by improving
energy efficiency in order to lower
emissions and gradually shift from
the use of fossil fuels to renewable
sources, while at the same time
reducing the cost of energy bills.
95
Annual Report 15 For people and the community
Logistics
When it comes to transporting
millions of tonnes of goods a year,
the efficiency of the logistics system
has to represent the primary critical
factor. On the other hand, the Conad
system’s numbers in this respect are
truly impressive: 490 million boxes
every year transit across 688,974
square metres of warehouse space
(the equivalent of 80 football pitches)
and travel on two wheels for dozens
and dozens of thousands of
kilometres.
It is therefore natural that a large
number of environmental projects
focus on supply chain management
in order to lower consumption,
emissions and costs.
Hubs
In 2015, the role of hubs was
bolstered, the large multi-customer
goods loading and distribution
platforms. The use of these hubs,
shared by several companies, and the
adoption of “collaborative logistics”
have generally helped lower CO2
emissions by 47%, while saving
600 million km every year as well
as about €750 million in transport
costs (source: GS1 Italy | Indicod-Ecr).
Continuing with the logic of optimising
distribution flows, in 2015, Conad
added the Anagni hub (Frosinone) to
its three main hubs, serving as the
transit point for non-food imports
and various class C products made
in the Centre-South. This will help fill
vehicles, streamline deliveries and
reduce the number of empty return
trips and therefore emissions too.
In the large Fiano Romano Hub, one
of the largest distribution platforms
in Europe, Conad has adopted an
innovative zero-emission technology
since 2015, which produces cold
at controlled temperatures with a
significant energy saving compared
with the past thanks to the use of a
special oil-free turbine (patented by
American aerospace research).
This new facility will lead to an energy
96
saving of over 4,000 MWh and 350
Toe: in environmental terms, these
values equate to over 800 tonnes of
CO2 prevented from being released
into the atmosphere and, from an
economic perspective, in a saving of
roughly €47 an hour compared with
traditional technologies.
Still in 2015, Conad also strengthened
the role of the major perishables
hub in Fidenza, a platform of about
11,000 sqm through which major
volumes of product are transported
(over 65,000 tonnes of food delivered
by 120 suppliers). By also relocating
Conad Meat deliveries to the Fidenza
site, it means that the space in
vehicles can be better filled in this
case too with clear advantages in
terms of sustainability. The Fidenza
hub already represented an efficient
model for many reasons, including
the use of the pallet pooling system
(involving the hire of pallets and
transport containers), the booking
of unloading slots, the control of the
cold chain and the adoption of RFID
tags. Together these innovations had
already helped limit the environmental
impact of the supply chain, drastically
reducing the kilometres travelled, as
shown by the study conducted by the
Industrial Engineering department
at the University of Bologna, which
measured the environmental impact
before and after centralisation across
various parameters (CO2, greenhouse
effect, smog, soil acidity, etc).
Pallet pooling
A major way of reducing CO2, wood
consumption and landfill waste is to
use the pallet pooling system, which
Conad adopted with the support of
Chep, its strategic partner with whom
it renewed its collaboration in 2015.
Based on the principles of
recovery, reuse and recycling, the
Chep model lets clients improve
environmental parameters, saving
on operations and costs. By using
pallets made and repaired with wood
Annual Report 15 For people and the community
certified by the PEFC (Programme
for the Endorsement of Forest
Certification) and the FSC (Forest
Stewardship Council), as well as
optimised transportation and
continuously recycled materials,
the system significantly reduces
environmental impact based on the
principle of exchange. To further
improve the benefits of efficiency
and sustainability, in 2015, Conad
extended this system to its network of
frozen products, reducing its overall
CO2 emissions by 2,627 tonnes and
its timber consumption by 2,346
m3, while also lowering its waste
production by 218 tonnes. These solid
results were calculated using the LCA
model in line with ISO standard 14044:
it is also the first life cycle analysis
conducted in Italy to proudly bear the
logo granted by the Ministry of the
Environment as part of the national
programme for environmental impact
assessment.
CPR system
Founded in 1998 by the pioneering
work of a group of people in the
agri-food chain – including Conad for
distribution – Cpr System is now a
leader in the field of environmentallyfriendly reusable plastic crates and
represents the Italian way of reusing
packaging for perishables.
It is a collaboration that now spans
thirty years, ranging from fruit and
vegetable crates to the most innovative
pallet pooling systems applied to
the brand fresh food sector too. The
results are also highly significant for
2015: 2,521 tonnes of CO2 saved in
crate management, 4,745 tonnes
saved in pallet management, along with
3,600 tonnes saved for Conad’s brand
fresh produce.
The Food Supply Chain research centre
at the University of Bologna conducted
the comparative analysis on the
efficiency and environmental impact
of the Conad distribution chain in fresh
food and perishables.
97
Annual Report 15 For people and the community
Reuse and recycling
Reusable shopping bags
Conad offers its customers a range of
environmentally-friendly alternatives
for carrying their shopping, which is
by no means trivial given the huge
numbers involved in the Conad system.
One only has to think that, in
2015, 300 million classic Mater-Bi
biodegradable and compostable
shopping bags were handed out
at Conad stores and, even though
made from eco-materials, they are
nevertheless designed for single
use. This is why once again in 2015,
the brand continued to incentivise
reusable plastic and cotton
alternatives, with almost 3 million
units handed out. In the last three
years, Conad has handed out 8.2
million reusable bags, which are now
favoured over disposable bags by
about 50% of customers.
This has also saved a significant
amount of CO2: 4,000 fewer tonnes of
plastic equate to about 22,000 tonnes
of CO2 saved.
Paper packaging
The packaging for fresh products that
customers buy at the store counter
is also part of the Conad strategy to
protect the environment. The bags,
wrappers, receipts and rolls used in
stores are all exclusively made with
FSC or PEFC certified paper, with pulp
from sustainably managed forests.
This type of choice has a significant
impact given the numbers involved. In
2015, Conad stores used 450 million
bags, 1.5 million till rolls and 250,000
reels of paper equating to 5,500
tonnes of FSC or PEFC certified pulp,
helping preserve the world’s forests.
98
Furthermore, to help customers
dispose of their packaging materials
properly, in 2015, a new scheme was
introduced: a clear, simple sentence
(“Segui sempre le regole del tuo Comune
e scopri di più su www.conad.it”) was
printed on all packaging used in store
bakeries, deli counters, fruit and
vegetable sections, butcher’s and
fishmongers. This small information
campaign produced big numbers:
660 million bags and sheets of paper
(source: Itaca).
Riciclare Conviene
The Riciclare Conviene initiative has
also made a significant contribution to
recycling and reusing. Created in 2011
by Conad and Tetra Pak Italia to raise
awareness among a growing number
of citizens, this initiative continued to
travel around as always in 2015.
Riciclare Conviene is based on a
reward system which gives customers
a discount on their shopping when
they return their used Tetra Paks
through a machine located outside
hypermarket and supermarket checkouts. Every stage of the campaign
calculates the number of coupons to
be collected to receive a €5 discount
at Conad stores when customers
spend a minimum of €50.
Throughout the 2015 campaign –
which visited the towns of Grosseto,
Arma di Taggia (Imperia) and Corciano
(Perugia) – a total of 40,000 Tetra
Paks were returned amounting to
14,000 tokens and 3,500 discount
coupons.
In four years, Riciclare Conviene has
helped recover 200,000 food Tetra
Paks.
99
Forecasts for 2016
In terms of its company structure,
a significant event occurred after the
close of the financial year with the
finalisation of the merger between
two Sicilian cooperatives in Conad
Sicily, signed on 1 March 2016. The
new company – which became the top
distributor on the island, with almost
16% of the market share – has 230
entrepreneur shareholders, over 3,900
employees, a network of 400 stores
and an annual turnover of €845 million.
In terms of the market, the perception
is growing, among observers, that
Italian consumers have begun –
albeit slowly and cautiously – to have
confidence in the future and in the
economic outlook of the country.
Work remains the main concern, while
they continue to pay attention to their
spending and saving is still a priority,
but the confidence index in the first
quarter of 2016 stands at 59, which is
two points higher than the same period
in 2015.
The Nielsen findings prove that retail
sales in the first four months are
showing a decline of 1.1%, even though
household spending on the whole has
not changed and, in particular, the wide
disparities in consumption – in terms
of geography, personal details and
income – that characterised 2015 still
linger on.
Consequently, Conad has decided to
extend its Bassi&Fissi initiative for all
of 2016, which – we should remember
– offers an ongoing discount of 23% on
337 essential brand products.
While it is true that the outlook for
2016 is essentially stable “offering
opportunities for brands ready
to invest in the new needs of the
consumer” – in the words of Giovanni
Fantasia, the CEO of the Nielsen
Italia Group –, the Conad system
is prepared to fully grasp these
opportunities, earmarking €188 million
in investments across the network for
the current year, which will cover the
opening of 88 new stores and 1,300
jobs, including new recruits (800) and
internal recruitment.
2016 is also the year of the launch of
“Conad Pet Stores”, a new format for
small animals, which have effectively
become part of the family. The first
four stores have so far been opened –
in Rubiera, Modena, Perugia and Arma
di Taggia – while the ribbon will be cut
on another sixteen stores, more or less
all over Italy, by next December; the
goal for the next three years is to set up
a channel of 100 Pet Stores, all located
near supermarkets or hypermarkets.
The pet food market is experiencing
strong growth (over 60 million pets
now live in our homes) and is one of the
few sectors not to have been hit by the
crisis. Hence the decision to dedicate
a major part of the development plan
to this new area, applying the brand’s
philosophy as always, based on quality
and convenience.
Throughout the year, the retailer’s
new brand, Verso Natura Conad, will
also be launched to cover emerging
consumption needs, such as organic
food, the use of non-food eco-products
and vegan or Fair Trade options.
The launch is expected for September
2016. Between spring and summer,
Conad’s Grande Viaggio will continue
around Italy’s many different towns,
with new stops for this year. This year’s
grand tour will begin in Lodi (16-17
April) and travel all across the country
over 12 consecutive weekends, ending
in Caserta (2- 3 July).
From an environmental perspective, we
should also highlight the memorandum
of understanding for sustainable
agriculture signed with Legambiente
in May, which aims to increase the
accountability of actors in Conad’s
food chains on issues of sustainability
(whether environmental, economic or
social).
101
Conad
Consorzio Nazionale Dettaglianti
Società Cooperativa
via Michelino 59, Bologna – Italia
Tax Code and Bologna Business Register No.
00865960157
VAT No. 03320960374
Bologna REA No. 195010
Cooperative Companies Register
A109846 – Section: prevalently mutual
The Company adopts the Code of Ethics
Legislative Decree 231/2001
www.conad.it
[email protected]
Tel +39 051 508 111
Fax +39 051 508 414
By Homina Pdc Comunicazione
Printed and packaged by
Grafiche dell’Artiere, Bentivoglio (Bologna)
June 2016