Business area Retail

New investments yield positive signals on the tough consumer market

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 tablecoverings, 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 2011

Overall, the grocery retail trade is a tough market in which sales of specialty goods are continuing to perform weakly. Market data (AC Nielsen) reports downturns in volume of 1-3% for Holland and Germany. The market for our category, as well as several other categories, has generally been weak. The market has to some extent also been affected by fewer campaigns in stores.

Sales in 2011 declined by 11.2%, to SEK 612 (689) m. Operating profit fell to SEK 21 (32) m. The operating margin weakened to 3.4% (4.6%).

The main cause for the downturn was the phasing out of a major private label customer which took place during the year. Otherwise, sales were stable. Thanks to various measures taken such as customer offering optimization and an increased customer focus, market shares were defended or, in the case of the UK and Benelux, increased.

Price increases have largely been carried out to compensate for the high raw materials costs in 2011, but the full impact will not be felt until 2012.

Central Europe – one of Retail's core markets – showed a stable trend. Sales were at same level as last year, while the profit level improved somewhat. The higher profit margin is a result of a continued focus on systematic optimization of the offering and customer profitability.

In the UK, Duni reported approximately 20% growth despite the negative macroeconomic climate. To a certain extent, the weak state of the economy has resulted in more festive meals being eaten at home instead of in restaurants, a factor which benefits sales of Duni's concepts for consumers. However, the underlying factors behind the successes are first and foremost achievements and increased cooperation with major key customers.

In Benelux, Duni enjoyed positive sales growth despite the category as a whole having contracted for the second year in a row. Sales efforts have primarily focused on new customers, resulting in new market shares being gained.

On the Nordic market, however, Retail lost market shares compared to 2010. In Sweden, the largest players are continuing to focus on private labels, which has a negative effect on sales. The trend is more positive in other Nordic countries.

Duni's unique premium concepts are suitable for holidays such as Christmas and Easter. Accordingly, during the year Duni continued to work actively with off-the-shelf campaigns, such as ready packaged solutions on display, and major resources were devoted to successful seasonally-related sales campaigns, particularly for Christmas.

Central Europe accounted for SEK 502 (543) m of net sales within Retail, the Nordic region for SEK 82 (94) m, Southern and Eastern Europe for SEK 26 (52) m, and other markets for SEK 2 (0) m.

Events in 2011

In Norway, Duni's products were listed by the Meny and Ultra chains within NorgesGruppen. There, Duni is complementing the existing range with its premium range on the shelf.

Migros, which is the largest retailer in Switzerland, listed Duni's premium concept as well as the Christmas range, in a selection of their larger stores.

In Germany, Duni continued to broaden its distribution to a number of stores in the Rewes hypermarket chain, Toom.

A major private label customer was lost during the year. On the other hand, we have generally defended our market shares within the grocery retail trade.

Duni's web shop for the Swedish market opened during the fourth quarter. The shop makes our products more easily available for the consumers. Duni will thereby be able to create more sales and increase its knowledge of consumers – knowledge which creates insight into which products are preferred, which in turn also creates added value in our cooperation with the traditional retail trade. On the Swedish market, a cooperation project was also initiated with a company specializing in home party sales.

In 2011, work continued on launching Duni's Delta Store concept in selected stores. It comprises freestanding and mobile shelf solution system specifically adapted to Duni's range, allowing for integrated and attractive displays of three different collections each season. During the year, the Delta Stores concept was launched on all markets apart from the Nordic region. At present, Duni has more than 600 Delta Store concepts located in stores.

Marketing, sales and customers

Sales to grocery retail chains and hypermarkets account for by far the largest portion of sales within Retail. A clear majority of sales consist of 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 unique premium products.

*As per April 1, 2012 business area Retail is changing its name to business area Consumer in order to better describe the business area's mission.

• This is Duni
• The year in brief
• CEO statement
• Operations
• Business areas
  • Professional
  • Retail
  • Tissue
• Employees
• Corporate social responsibility
• The share

Duni's products can now also be bought on our web-shop, on www.duni.se