This report overviews the characteristics of the grocery retail sector and how best to place U.S. products in the Italian market
THIS REPORT CONTAINS ASSESSMENTS OF COMMODITY AND TRADE ISSUES MADE BY
USDA STAFF AND NOT NECESSARILY STATEMENTS OF OFFICIAL U.S. GOVERNMENT
GAIN Report Number: IT1246
Italian Food Retail and Distribution Sector Report
In Italy, the grocery retail sector is extremely fragmented and resistant to change. Consolidation
remains low and traditional grocery stores remain the majority of the outlets, followed by open-air
markets. Nonetheless, consolidation is slowly gaining momentum, as a few Italian and foreign
operators are starting to expand their network of stores, particularly in the south of the country. This
report overviews the characteristics of the grocery retail sector and how best to place U.S. products in
the Italian market.
Section 1. The Italian Retail Market Overview
Unlike other European nations, the Italian retail sector has been resistant to change, as consolidation
remains low and traditional grocery stores (so-called Mom and Pop stores) continue to represent the
largest segment of the food retail sector, followed by open-air markets. Nonetheless, consolidation is
slowly gaining momentum, as a few Italian and foreign operators are starting to expand their network
of stores, particularly in the south of the country. Italy has a diversified industrial economy, divided
into a developed industrial north, dominated by private companies, and a less-developed agricultural
south, afflicted with high unemployment. This division in reflected in the distribution of retail outlets,
with the majority of the supermarkets located in the north (53%), followed by south (27%) and then by
the center region of Italy (20%). While small neighborhood shops and specialty stores are still the
norm, Italian consumers are discovering the convenience of large supermarket and hypermarket
outlets. Italians still place great value on the quality and freshness of products (rather than frozen),
which is reflected in the practice of daily shopping, rather than weekly bulk shopping. Larger
supermarket and hypermarket stores are slowly introducing Private label brands; however, unlike
other European countries, consumer acceptance in Italy is still relatively low.
The Italian population is aging and projected to decline in coming years. While living longer, Italians
are having fewer children and marrying at a much later age. In addition, contrary to trends across
Europe, the majority of Italians still live in small cities and towns. Planning laws in Italy tend to favor
smaller stores, and no planning permission is needed for outlets with a sales area of less than 250m² in
towns of more than 10,000 people. Local communities are often strongly opposed to the
development of large stores such as hypermarkets and the system requires permission from local and
regional authorities, making it difficult to establish larger stores. At the same time, continuing societal
trends toward smaller families, later marriages, and an increasing number of women in the workforce
are resulting in food retail outlets offering ready-made, ready-to-serve products and a wider range of
There are six major players in the Italian retail sector: Coop Italia, Conad, Interdis, Carrefour, Auchan,
and SPAR. Four of the leading players - Coop Italia, Interdis, SPAR, and Conad - exist as consortiums of
smaller operators and owe some of their success to their detailed knowledge of local requirements
and shoppers' preferences. Other major retailers are Esselunga, Gruppo Pam, French retailers
Carrefour, Auchan, and Leclerc, as well as German retailer Rewe and discount chain Lidl. Thanks to
ventures with local operators, foreign retailers like Leclerc, Carrefour, and Auchan have been able to
build up a nationwide network.
One particular characteristic of the Italian retail sector is the large number of Buyer Groups, which
emerged from the mid-1990s onwards with the aim of sourcing products more cheaply through
greater purchasing power. In Italy, all major mass grocery retailers are members of a buying group,
with the major ones being Intermedia (whose members include Rinascente, Gruppo Pam, and Conad),
Mecades (Interdis, Sisa, and SPAR), Coop Italia (Coop and Sigma), Esd Italia (Esselunga, Selex, and
Agorà), and Carrefour Italia (with Carrefour, Finiper and Il Gigante). The presence of these buying
groups has for many years presented a market entry barrier for foreign retailers, which have had to
create joint ventures with local operators in order to have access to the market. Although the Italian
sector remains fragmented, consolidation has been increasing over recent years. This process has
been spearheaded mainly by foreign multinationals, which continue to enter into partnerships with
local players in order to make use of their local expertise and to expand without breaching strict
The future of the discount store format remains uncertain, as Italian consumers have not seemed to
appreciate the merits of a no-frills store, with basic packaging and often limited selection. Perhaps by
improving their branded product range and providing a few more whistles and bells, these types of
store might attracted a larger customer base. Discount retailers will need to move away from a cheap,
low-quality image by improving the private label products on offer, increasing the number of
manufacturer-branded rather than retail-branded products, and improving the shopping experience
through a friendlier store environment. The economic downturn has had a major impact on Italian
shopping habits prompting consumers to visit discount stores and purchase private label products
more than they did before.
Italian importers are usually small to medium-sized companies, rather than the large, market-
dominating varieties found in northern Europe. Consequently, these companies import on a smaller
scale and usually in a broader range than their much larger counterparts. Most imported food
products enter the Italian market through brokers or specialized traders. Price is an increasingly
important basis for import purchase decisions, although quality and novelty do move some products.
Imported products from North America often enter Italy indirectly from the Netherlands' Port of
Rotterdam or directly via air.
Wholesalers are the main customers for fish and seafood products, as they purchase and distribute
products to consumers through supermarkets, hypermarkets, local fish shops, restaurants, and
fishmongers and fish processors. In Italy, there are over 1000 fish wholesalers--100 of which are
considered to be importers.
Table: Key Players In Italy's Mass Grocery Retail Sector - 2011
O Sales rigin of f
Company (€ Fascia Form No. oat
Company m Outlets illions)
Coop Italia Italy 13,100 1,394
Estense Hypermarkets 537
Discount stores 63
Italy 10,200 2,946
Conad Supermarkets 1,415
Auchan France 7200 1,490
Auchan Hypermarkets 45
Sma, Citiper Supermarkets 1,445
Interdis Italy 5,492 2,667
Discount stores 290
Specialty stores 151
Cash & Carry 53
Carrefour France 6,067 1,599
Carrefour Hypermarkets 69
GS Supermarkets 475
D onvenience iperD Ci 1,030
Grosslper Cash & Carry 25
Esselunga Italy 6,540 Esselunga Supermarkets 134
Spar Netherlands 3,855 1,549
taly 2,559 595
In's Mercato Discount stores
Gr Austria/Germany 2,850 556 oup
Billa Supermarkets 66
Standa Supermarkets 245
Penny Market Discount stores 245
Lidl Germany 1,300 Discount stores 320
Source: Institute of Grocery Distribution, Investor relations, BMI
Road Map for Market Entry
The best way to begin exporting to Italy is to either identify a key Buyer Group or an importer, as both
know how to best navigate the import and distribution process and are able to engage directly with
Italian food retailers. They are key to doing business in Italy. Food importing is a specialized business,
and an importer plays a pivotal role in navigating the hurdles of Italian and EU food law. Importers
normally carry a whole range of products. The terms and length of association between the U.S.
Company and the Italian company are normally established by contract.
Survey existing and potential opportunities by reviewing FAS policy and market GAIN reports
and consider engaging a market research firm to assist in analyzing market opportunities and
Establish a relationship with an Italian importer/distributor that provides services to the food-
Be prepared to start small by shipping a few pallets or cases of a product and recognize that it
could take several months or years before an importer is ready to order full containers. Italians
place a lot of importance on first building the trust to consolidate the business relationship.
Be willing to meet special EU labeling requirements and consider working through a
consolidator or participating in mixed containers.
Participation in some of the larger European international food trade shows (ANUGA and SIAL) offers a
good opportunity to get a sense of the Italian market and provides the opportunity to meet potential
Italian importers or distributors.
Market entry to the Italian retail sector requires patience, and substantial homework on the part of
the U.S. exporting company to ensure that all import regulations and labeling laws are met. These
issues are covered in the FAS Rome - Food and Agricultural Importer Regulations (FAIRS) Report,
available at http://gain.fas.usda.gov/Pages/Default.aspx.
Key Industry Trends and Developments
In July 2012, Italian retailer Conad reported a 4% increase in revenues for 2011, with €10.2 billion in
sales. Conad has announced their expansion plan throughout Italy with 260 new outlets.
In June 2012, French retailer group Auchan signed a deal with Italy-based retailer Fratelli Morgheseto
for the addition of 20 new outlets to Auchan's existing network in Italy. The stores will operate under
the “Simply Market” banner, of which there are currently 1,800 outlets throughout Italy.
The Italian retail sector remains one of the most fragmented in the EU, as many of the leading brands
exist as networks of smaller companies, including the two largest chains in Italy, Conad, and Coop
Italia. With a market share of 13.7%, Coop Italia is the country's largest retailer, followed by Auchan
(7.6%), Esselunga (6.9%), Carrefour (6.8%), Interdis (5.8%), and Rewe (3%).
Retail Sector Strengths and Weakness
Competition in the Italian food market is fierce and many
Italians are traveling more, consumers still prefer traditional Italian products.
becoming aware of foreign
Italy is a member of the Euro Italian retail sector is extremely fragmented, and the
zone, which eases market entry. mandatory customs duties, sanitary inspections, and labeling
requirements can be onerous.
Interest in new and innovative Competition from similar food products produced in other EU
products, especially with a health countries that enter tariff free.
U.S. Ag Exports to Italy $1.1B U.S. Ag Imports from Italy $3.5B
Tree Nuts: $177 million Wine: $1,494 million
Wheat: $159 million Olive Oil: $526 million
Hardwood Lumber: $76 million Cheese: $312 million
Italy is a major food processor and a net agricultural importer.
U.S. exports mostly Bulk Commodities to Italy.
Italy exports mainly Consumer Products to the U.S.
Exchange Rate: EURO per U.S. Dollar
$1 = 0.7194 (2011)
Source: European Central Bank
Best Products Prospects
A. U.S. products in the Italian market that have good sales potential:
Wild salmon from Alaska
Tex Mex and other ethnic foods
B. Products not present in significant quantities but which have good sales potential:
Dressings and sauces/condiments
C. Products not present because they face significant trade barriers:
Processed food products containing biotech ingredients
Key Trade & Demographic Information - Italy 2011
Agricultural, Fish/Forestry Imports from the U.S. Consumer Food Imports from
$1.945 billion (est.) the U.S.
Fish and Seafood Imports from the U.S. Unemployment Rate:
$43 million 8.4 percent
Italian Population Total Rural Population:
61,016,804 20 Million
Foreign Population Total Urban Population:
4 million 40 Million
Major City Centers and Population: Per Capita Income:
Rome 3.357 million; Milan 2.962 million; Naples 2.27 million; Turin $30,900
1.662 million; Palermo 872,000
Gross Domestic Product: Labor Force
$2.25 trillion 25.08 million
Exchange Rate: EURO per U.S. Dollar
A verage 2011: €0.710 = $1.00
Section 4. Contact Information
USDA FAS Contacts in Rome, Italy
U.S. travelers to Italy seeking appointments with U.S. Foreign Agriculture Service officials at Embassy
Rome should contact the office at:
Office of Agricultural Affairs,
Via Veneto 119, Rome, 00187, Italy
Tel: (011) (39) 06 4674 2396
Fax: (011) (39) 06 4788 7008
Senior Agricultural Specialist