Bon appétit hit by retail price wars

Swiss group Bon appétit​ saw its sales fall in the first half as its smaller stores suffered at the hands of rapidly-expanding rivals and a retail price war.

Bon appétit said that sales for the first six months of the year declined by 3.7 per cent to SF1.5 billion (€970m) compared with the same period in 2002 as sales at the Frimago group (smaller stores operating under the Primo and Visavis fascias) dropped by 12.5 per cent.

There was also a 3 per cent drop in sales to the catering trade by the group's Howeg unit, which the company has now decided to restructure in a bid to reduce its cost base.

The group's other Swiss subsidiaries Pick Pay, Usego, Magro, Lekkerland and Prodega all managed to increase sales despite the difficult conditions, the group said, while the Aldis Service Plus catering supplies group based in France posted a 3.2 per cent increase in sales in local currency terms.

Total sales by the retail division reached SF1 billion, a 2.7 per cent drop compared to 2002, while catering division sales were down 2.8 per cent to SF517.9 million. Sales were particularly poor in May, the company said, but began to pick up again in June.

The company also said it had taken a number of measures to halt the decline in sales at the smaller convenience and neighbourhood stores, whose margins cannot support the deep discounting currently being used by the larger Swiss retail groups such as Migros and Co-op to attract new customers.

The Frimago group has now been integrated into the Usego food wholesale company, which handles the logistics for most of Bon appétit's stores, helping to reduce costs in this area, while the group's sales activities have also been restructured.

Bon appétit is in the process of being acquired by Rewe, one of Germany's leading food retail and catering supply groups.