Convenience as the shopping experience and as a product range combined with an ever growing fresh food selection – that is foodvenience at Valora.>
[* = Food + Convenience]
There is great demand for foodvenience in society. This is demonstrated by the substantial growth rates posted by the Swiss and German convenience markets, as well as those of the Valora Group in the foodvenience categories food, non-food (excluding press, books, tobacco) and services. Food accounts for the biggest share of Valora’s foodvenience external sales.
Although the COVID-19 pandemic has had a massive impact on customer decisions and perception, convenience remains a promising segment, both at points of sale and increasingly online. Young, urban customers in particular have the greatest potential. Health and quality aspects are playing an increasingly important role here (Oliver Wyman, 2021). Besides highly frequented locations in the inner city and agglomerations, shopping centres and service stations, transport hubs are particularly ideal foodvenience locations.
Valora is convinced: The future prospects for the foodvenience business remain attractive. This is true despite the fact that official restrictions to contain the virus are temporarily causing demand to decline in all Valora markets – particularly for out-of-home catering, at normally highly frequented public transport locations and in city centres, where Valora generated around two-thirds of its revenue before the crisis.
The easing of restrictions and vaccination campaigns in the second year of the crisis had a visibly positive impact on the mobility of the population and thus on customer footfall. Above all, vaccination success boosted consumer confidence and positively stimulated buying behaviour. As a result, the recovery of the foodvenience business increasingly gained traction from March 2021 onwards after the tough lockdown at the beginning of the year. This allowed Valora to increase the EBIT margin to 2.4 % in the second half of 2021. At the same time, Valora saw a first clear catch-up effect in its food category. While growth of Group external sales was + 6 % for March to December 2021, food sales were up + 18 %.
These developments underline Valora’s conviction that out-of-home consumption at highly frequented locations will recover once the crisis has been overcome and as soon as far-reaching restrictions are no longer necessary. The most significant operational leverage will be in the food service business, which suffered the most during the crisis.