An update of the world's grocery and consumer goods retailing sector from CIES, the Food Business Forum.

Loyalty grows: More than half of European retailers have some sort of loyalty program in place, according to a survey of 146 retail chains done by KPMG and CIES. Of these, 42% are card-based, up from less than a quarter two years ago. Increasing customer retention was cited as the important objective in implementing a loyalty program, well ahead of increasing average basket size and attracting new customers. Interestingly, two-thirds of retailers in the survey did not know whether their loyalty programs had improved their profitability.

Ready to go: Belgian grocery chain GB has launched an on-line order and collect service called Ready Store. GB's customers can order more than 3,000 items from the company's Internet site (www.ready.be), and then collect the groceries the following day between 4 p.m. and 9 p.m. from a number of pick-up points around Brussels. Although the price of the products at Ready Store is no higher than at GB's retail stores, the company charges customers 110 Belgium francs (U.S. $3) to use the service, plus 3% of the price of the order.

Big spenders: Your best customers may not be your most loyal customers, according to a study of food retailers in Europe, Australia and the United States, by ACNielsen with INSEAD, the French business school. The study, presented at the October CIES Global Marketing Conference in Geneva, Switzerland, found that a store's most loyal customers (defined as those who make more than half their weekly grocery spend at that store) only account for 22% of its sales on average. By contrast, the least loyal customers (those who make no more than 10% of their weekly spend at that store) account for a still significant 11% of sales. The conclusion to be drawn from this data, according to Jean-Jacques Vandenheede, vice president at ACNielsen, is that the real issue for retailers is not customer loyalty, but big spenders vs. low spenders.

SIAL 98 trends: The international food products exhibition held biannually in Paris highlighted some of the major innovations made by food manufacturers from around the world. In 1998, close to half of all new food products put a direct emphasis on health and well-being, according to a survey commissioned by SIAL. This category includes the new wave of so-called functional foods, such as a yogurt recently launched by Danone containing aloe vera, a plant extract that benefits the skin. This year's emerging category is ethical products—those that promise to do some good to the earth or its inhabitants.

The Euro is coming: At the end of 1998, exchange rates between 11 of the European countries will be fixed, apparently irrevocably, to prepare for the Eurodollar's introduction. What this means for food retailers, their suppliers and for the consumer is subject to intense speculation. Everybody agrees that relations and communication between these three parties, both inside and outside the EU, are bound to change. There is less consensus as to how they will change. (Find out more at the first 1999 CIES event, "Marketing and Communicating with the Euro," to be held Feb. 3-4, in Geneva.)