Business area Retail

Increased profitability

Within the Retail business area, Duni offers products to consumers via the grocery retail trade, specialty stores and home furnishings stores.

The range of table top products within the Retail business area is largely the same as within the Professional business area, but is adapted to the needs of customers and end consumers for various qualities and packaging solutions. The product range creatively combines design and functionality to create pleasant environments for all occasions when enjoying food and drink. It includes everything from napkins, candles and table covers to plastic products such as glasses, cups, cutlery and plates. Within the Retail business area, Duni also sells hygienic wipes in tissue and gift wrapping paper. To a limited extent, Duni supplies products which are resold under customers’ own brands (private labels). 

Development in 2010

In 2010, sales declined by 12.9%, to SEK 689 (792) m. Operating income improved to SEK 32 (18) m. The operating margin strengthened to 4.6% (2.2%). Thus, the target of an operating margin of 5% has largely been achieved.

Retail sales within the non-food category developed negatively, particularly during the first part of the year. Nielsen data from two important markets, Holland and Germany, shows falls in napkins sales of 10% and 5% respectively. Focus within the trade has been on volume rather than quality and experience, which has favored low-priced products and private labels.

Despite the combination of a weak market trend and increasing raw materials costs, the profit margin improved during 2010. This is due primarily to Duni's strong focus on customer profitability combined with sound cost control and systematic product range optimization.

The market in Central Europe experienced a weak first half of the year. As a result, sales fell at Duni's key customers. An improved market trend was discernible during the second half of the year, which also benefited Retail's sales. In addition, the profit margin in Germany improved thanks to specific measures linked to a number of major customer agreements.

In the UK, the market as a whole performed negatively during the year, but Duni was nevertheless able to report growth thanks to closer cooperation with existing key customers and agreements with new customers. Duni lost sales in a weak Benelux market. On the Nordic market, Duni lost market shares mainly due to increased competition from private labels. During the year, Duni has continued to terminate unprofitable contracts in specific product segments, while at the same time endeavouring to create a broader distribution towards more profitable customer segments.

Seasonal sales are extremely important within Duni's category, not least the Christmas sales. Retail posted successful Christmas sales, which was an important reason behind the improvement in income. At the same time, work has begun on creating profitable transactions within the private labels area. The aim is to have a broader approach to the category, thereby creating conditions for more profitable overall transactions.

Central Europe accounted for SEK 543 (643) m of net sales within Retail, the Nordic region for SEK 94 (116) m, and Southern and Eastern Europe for SEK 52 (32) m.

Events in 2010

In Norway, the cooperation with approximately 600 ICA stores was implemented, entailing a positive development for both Duni and ICA. Duni's products have also been placed on key product range listings in the Hemköp chain in Sweden. The category comprises Axfood's private labels and Duni's product range.

During 2010, work continued on launching Duni's Delta Store concept in selected stores. It comprises independent and mobile shelf solutions specifically adapted to Duni’s range which allow for integrated and attractive displays of three different collections each season. The concept is based on experiences from Duni’s Concept Store but is on a smaller scale and suits several types of stores. During the year, the Delta Store concept was introduced mainly in Germany and the Benelux countries. In the Benelux countries, Delta Stores have been an important tool for gaining new customers and new distribution. During 2010, Duni has placed over 100 Delta Stores in the Benelux countries.

In Germany, Duni obtained increased distribution during the year in a number of stores within the Rewes DIY chain. In addition, the cooperation with the e-commerce site www.serviette.de has been successful, resulting in a sharp increase in sales.

The year saw the launch of, among other things, a napkin box. The new napkin box has many advantages, including improved table top stability, a more attractive design, and higher quality napkins.

Marketing, sales and customers

Sales to grocery retail chains and hypermarkets account for the large majority within Retail. The main part of sales is Duni branded products. Marketing and sales are based on key account management which, among other things, means that particularly important customers – primarily grocery retail chains – have their own customer account manager at Duni. In addition to key account management, there is also a sales force in each region which spends a large part of its time in the field visiting the customers. These customer visits often concern merchandising, the marketing of new product ranges and the implementation of campaigns and activities. Merchandising is carried out by Duni’s personnel and external partners. Sales also take place to pharmacies, chain stores in the home furnishings sector as well as various specialty stores and gardening outlets.

Duni works together with the retail trade to optimize sales in the product category. Individual products are brought together into a concept based on the customers’ different needs and uses. Category growth and profitability are created by increasing the presence of Duni’s brand and the share of premium products.

 

• This is Duni
• The Year in brief
• CEO statement
• Operations
• Business areas
  • Professional
  • Retail
  • Tissue
• Personnel
• Corporate social responsibility
• Financial targets
• The Share

Collections are adapted to each season.