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Stop counting supermarkets in Spain: they don't dominate frozen retailing.

Stop Counting Supermarkets in Spain: They Don't Dominate Frozen Retailing

While foreign supermarket concepts have taken root, the real frozen food volume moves through mercados that are concentrated throughout the country. And it seems that non-packaged, loose bulk items are what shoppers prefer.

In most countries, it is the supermarkets that lead the way in frozen food marketing. So much so, that store brands often take precedence over manufacturer's brands. Not so in Spain.

For a start there are probably no more than 5,000 supermarkets, and they account for not much more than 30% of total food sales. Other styles of retailing are popular ...and for very different reasons.

Consider this: There are about 100 hypermarkets in Spain thanks to imported influences from neighboring France where Carrefour, Auchan and others have made a huge success of this kind of all-purpose retail layout. (For the American reader, a typical hypermarket is a kind of cross between K mart and Kroger, with twice as many checkout counters...and rather less car parking space!)

They include Hipermercados Pryca, a subsidiary of the French group Carrefour with 25 outlets and a 1988 turnover of 212,500 mpts; Continente Saudisa with 13 stores; Alcampo (which Quick Frozen Foods International reviewed in its Spanish market survey published last April) with 11. All are owned by the French.

Mercados is an important word in Spanish retailing. Strictly speaking it means market. There are 50 mercados devoted to food in Madrid alone, and at least 10 times that many nationally. Having inspected a number of such units in Madrid during February, QFFI will concentrate on them in this report rather than throw together a slew of statistics that fail to convey the reality of Spanish eating and food buying habits.

A unique food retailing style in Britain is the freezer center, not to be found in many other countries. Just as unique in Spain are the frozen food shops in the mercados. They sell nothing but frozen foods, everything is loose and readily scoopable by the clerk behind the cabinets.

The whole situation takes this writer back 30 years to a time in England when trade disputes raged about selling frozen foods loose. At that time, the major packers met in solemn conclave and issued pronouncements about the importance of packaging as protection, and the risk of product contamination from bacteria in the atmosphere.

Now here we are in Spain with what is fundamentally a different situation. For a start, fresh food distribution has moved on everywhere. But in Spain it was always good. One can see that elsewhere in these mercados. Essentially, these closed markets contain a variety of food stalls stacked high with fresh fruits and vegetables, meat cuts, fish, breads, cakes and confectionery. Now, in addition, lively entrepreneurs have bought low temperature display cases to put on three sides of a square. They are filled with unthawed fish, meat and vegetables -- all ready for the shopper to select and for the server to bag in transparent film.

At the mercados QFFI was taken to by Sr. Allo of the Spanish Fish Processing Association (ANIE), this reporter met Sr. Alonso, who has three of these stalls at one location: one for fish, one for vegetables, and one for meat. An ebullient man, he has clearly made a commercial success of this enterprise. And he advised that there are many more like it in the major cities.

In Madrid alone there are 500, in Barcelona as many again. There could be 5,000 in Spain altogether; nobody has counted. The food looks excellent and the Spanish customer is obviously unworried about buying frozens this way. The attitude was explained this way: If she accepts her fresh food sold in this fashion, why on earth should she worry about food that has also been frozen!

Sure, one cannot play the branded marketing game without packets; but who in 1990 cares about packets in Iberia? It was different in 1960, in England, where it was all starting. But anyone wanting to sell into Spain at the present time had better stop counting supermarkets.

Having said that, one of the country's most successful and modern chains is Corte Ingles, with branches scattered all over the major towns and cities. In every hotel guests get a map -- courtesy of Corte Ingles -- marked with green flags that point out branches.

Corte Ingles is not a supermarket chain; it is rather a network of department stores. On the first, second and third floors one finds clothing, jewelry, tobacco products, etc. On the sixth floor -- and sometimes in the basement -- are the food and wine halls which are comparable to supermarkets in most cities. Here is where frozen food sections most like those of North America and England -- full of packets, polybags and brands -- are seen.

Here too is where one finds -- alongside Pescanova, Delfin, Frudesa and Krupemar -- the international brands of McCain, Groko, Bonduelle, Ross, Buitoni, and many others. But it is doubtful whether this is the real frozen food market of Spain. A lot of people are clearly making a good living out of the mercados.

Sr. Allo put the distribution system into perspective for QFFI by pointing out that although 80% of the fish landed in Spain is frozen to ensure hygienic distribution to the market, only 33% reaches consumers in the conventional frozen form of packets. This reporter found the figure of 80% surprising because as a devotee of Spanish fish restaurants he has been enjoying such things as fresh lubina (sea bass) baked in salt.

As for merluzza (hake), it's everywhere, frozen or otherwise. The word is that most of it gets to Madrid on ice -- just like the squid, octopus, langostinos, oysters, salmon and other species that can be bought off the fish stalls in the mercados.

Public perception is perhaps not a well developed science in Spain, but customer attitudes toward frozens are probably a little more positive than is the case, for example, in Britain and North America, where it carries more negatives than positives. If anything, the public perception of frozens in Spain is to the advantage of those who use freezing for distribution purposes and not as a means of gaining entry into the supermarkets. Packets and advertising are not important; fresh food well presented is. It is not a good environment in which to nurture supermarkets, but the strength of multi-national marketing in Europe as a whole will see to it that what has happened elesewhere will happen in Spain.

And if your romantic perception of Spain has been created by reading Ernest Hemingway, try the reality. This is a very modern country with very sophisticated hotels, roads and transportation systems. Madrid is a modern city, but its markets and restaurants maintain the country's reputation for good food.

The figures maintain that some 250 new supermarkets are opened every year in Spain, but there are still about 90,000 traditional shops and about 19,000 self-service stores.

GRAHAM KEMP QFFI Special Correspondent and World Food Congress Director
COPYRIGHT 1990 E.W. Williams Publications, Inc.
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Author:Kemp, Graham
Publication:Quick Frozen Foods International
Date:Apr 1, 1990
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