BOOST GROWTH AND CREATE JOBS IN EUROPEHOW RETAIL AND WHOLESALE CAN

FOR GROWTHSHOPPING

MANIFESTO FOR THE NEW PARLIAMENT AND COMMISSION

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KAUPPA

CONFCOMMERCIO FEDERDISTRIBUZIONE

SVENSK HANDEL

VIRKE

EKL

LTA

LPIA

COMEOS

CLC

ZOCR

OKSZ VOSZ

BGA HDE

CDCF CGI FCD

MKB RND

BRC

RETAIL IRELAND

PIH POHID

DANSK ERHVERV

ANGED ASEDAS

CEC

ACCI NCHC

APED CCP

AMRCR

SV

SOCR

WKÖ

TZS

GRTU

CCCI

FI

EE

LV

PL

CZ

SK

HU RO

DE

NL

BE

LU

ES

PT

UK

EI

SE

NO

AT

FR

EL

MEMBER COMPANIES

MEMBER ASSOCIATIONS

AFFILIATED FEDERATIONS

IS

- AEDT

- AMPD

- CBL

- CEDDEC

- CELCAA

- DSE

- Ecommerce Europe

- EDRA

- EFF

- ETRC

- ETV

- FECC

- FENA

- HGK

- HUP

- IELKA

- Independent Retail Europe

- SACAR

- Seldia

- STL

- VSIG

DK

LT

SI

MT

CY

IT

As of October 2013.

About EuroCommerceE u ro Co m m e rce re p re s e n t s t h e r e t a i l , w h o le s a le a n d internat ional t rade sectors i n E u ro p e. I t s m e m b e r s h i p includes commerce federations and companies in 31 European countries. Commerce plays a un ique role in the European economy, act ing as the l ink between producers and the nearly 500 million consumers across Europe, over 100 million times a day.

See page 10-11 for more facts and figures about retail and wholesale in Europe.

www.eurocommerce.eu

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FOREWORD

Our main proposals for the next five years are for :

> a digital policy that helps retail and consumers in the digital age

> a plan for European retail and awholesale competitiveness and more open markets

> a voluntary approach to fair relations with suppliers and to sustainability

Baroness Neville-Rolfe, DBE, CMG President

Christian VerschuerenDirector–General

We are at the dawn of a new European legislature. The next five years will be critical in returning the European economy to growth and job creation. Retail and wholesale can contribute, given the right economic and policy conditions. The sector is the interface between producers and consumers, serving 500 million European consumers every day. Consumers choose between retailers each and every time they shop. So retailers compete daily for a share of billions of annual shopping trips across the EU.

Retailing and wholesaling account for 1 in 4 enterprises in Europe, contribute 11% of Europe’s gross added value and provide 1 in 7 jobs. Our sector employs nearly 30 million people. It offers varied careers, whether to young graduates, to older people with limited skills, to those seeking part-time work to combine with caring responsibilities, or to cutting edge technical experts.

To deliver growth and create jobs, the sector needs the right policy framework. Barriers remain to flexible trading : a Single Market in goods and services is not yet a full reality ; labour markets in some Member States are inflexible, preventing retail and wholesale from adapting to customers’ needs ; protec-tionism impedes global trade.

The sector is undergoing a major transformation, driven primarily by the rapid expansion of the digital economy. Retail and wholesale are adapting at pace, anticipating customers’ changing needs and prefer-ences. This e-commerce revolution has coincided with continuing recession in many Member States. Consumer spending is down and competition is fierce, putting a premium on innovation and efficiency, while making it harder to earn a return on investment.

At EuroCommerce we bring together associations representing retail and wholesale in 31 European countries along with small and large companies from across Europe. We represent all retail channels, all types of wholesale, and all commerce business models in the EU. Our broad and diverse membership gives us strength and legitimacy.

We welcome the increasing recognition by EU politicians of the important role of commerce as an economic driver. In January 2013 the European Commission published its European Retail Action Plan. It sets out a strategy to improve further the competitiveness of the retail sector and to enhance the sector’s economic, environmental and social performance. This policy ambition now must be firmly embedded in policy-making. The EU institutions should ensure retail and wholesale are at the heart of their thinking. With the right policy and legislative environment, our sector will respond, supporting growth and creating jobs in the European economy.

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The retail and wholesale sector is in the midst of a global digital revolution bringing fundamental changes to the way consumers shop (see box). Many retailers, small and large, are embracing digital technology and multi-channel retailing, combining traditional bricks-and-mortar shops with online services, and offering new delivery solutions, such as click-and-collect. Wholesalers are also adapting to the digital age.

Retailers and wholesalers are adapting to meet changing consumer expectations, investing in technology, operations and talent to deliver multiple channels and their seamless integration. They are changing their business models and offering. ‘Digital native’ entrepreneurs are launching new retail businesses everywhere. This digital transformation poses a challenge to traditional shopping areas which need to reinvent themselves to compete. Struggling town centres affect the social fabric of communities so traditional forms of commerce need help in adapting to this digital revolution. Legislation and policy should be developed in ways that are fair to all forms of retail and wholesale.

The digital revolution empowers consumers as never before. They have increased access to price and product information, making it much easier to find the best deal. Consumers increasingly expect to buy what they want, how they want and when they want it. Consumer confidence in the full range of channels is paramount. The sector serves 500 million consumers every day, providing helpful information and consumer protection. Multi-channel retailing changes the interaction between consumer and retailer as the ways in which consumers choose products, pay for them, return goods and seek redress alter. Consumer policy and regulation also need to evolve to match these changes.

Customer-centred developments include

> more sophisticated and personalised communications with consumers through different channels ;

> changing store footprints in towns and cities, driven by consumer choice and new forms of commerce ;

> new online and multi-channel formats disrupting the retail market and capturing market share, including manufacturers’ own online outlets and flagship stores ;

> retail companies seeking to become vertically integrated, controlling the whole value chain ;

> new and different skills requirements and job functions ;

> consumers needing new and safe payment solutions to pay online and across borders.

1 WE NEED A POLICY THAT HELPS RETAIL AND CONSUMERS IN THE DIGITAL AGE

www.

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IN 2013, EUROPEAN E-COMMERCE

WILL REACH A TURNOVER OF €350 BILLION

The challenge for policy-makers is to keep pace with the shifting landscape of com-merce, adapting the legal, regulatory and policy framework. Policies to unleash the potential of commerce in the digital age should include :

0

50

100

150

200

250

300

350

2009 2013 (est.)

€ 350 bn

€ 318 bn€ 338 bn

€ 167 bn

€ 84 bn

€ 185 bn

+ 15% / year

+ 42% / year

+ 20% / year*Europe Asia Pacific N. America

* CAGR 2009-2013 Source : EMOTA

… policies should be developed to reflect changes in consumer demand, removing unjustified and unfair competitive advantages to particular retail channels (‘channel-neutrality’). This applies particularly in areas such as taxation, employment law and environmental obligations.

A level playing field in policy and legislation for all forms and channels of commerce…

See our policy guidance paper on e-commerce and multichannel retail for more details.

1

… would help traders seeking to establish cross border e-commerce businesses or to adapt to this new land-scape. An online one-stop-shop providing user-friend-ly information on legislative requirements in every Member State (e.g. VAT regimes, product requirements and establishment rules) could also showcase best practice case studies of traditional retailers or wholesalers reinventing themselves and city centres adapting to the new competitive landscape.

A single digital portal for retail and wholesale…

2

… should cap card fees to the benefit of consumers and make online payments more competitive.

Swift adoption and implementation of the Regulation on interchange bank fees and Payment Services Directive…

3

… including the swift implementation of the Consumer Rights Directive, proportionate regulation on data pro-tection, and modern and efficient ways of providing consumer information.

Consumer policy and legislation fit for the digital age and enhancing consumer trust in new forms of commerce...

4

… ensuring world class ICT infrastructure throughout Europe, including broadband and mobile networks, to support multi-channel operations.

… educating all EU citizens, so that they are digitally savvy ; this is crucial for getting jobs and for living a convenient life in the digital age.

Completing the Digital Single Market...5

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2WE NEED A PLAN FOR EUROPEAN RETAIL AND WHOLESALE COMPETITIVENESS – TO REMOVE BARRIERS TO GROWTH AND JOBS CREATION

As Europe’s largest private sector employer, closely linked to 500 million consumers, retail and wholesale have the potential to drive Europe out of the deepest economic crisis we have faced in over 80 years. Strong but fair competition in retailing is the best guarantee to keep prices down and preserve consumer purchasing power.

By working with their suppliers, providing routes to market, retailers ensure the best deal for consumers and business customers. Every day retailers compete to deliver customers a wide choice of products at the keenest price.

Retailing is strongly rooted in the local community. More than 99% of the 5.5 million retail businesses in Europe are small and medium-sized enterprises. Almost 30 million Europeans work in retail or wholesale, and the sector is one of the few steadily creating employment across Europe. In addition, the sector supports millions of jobs with local suppliers and producers, but rigid employment legislation in some Member States still prevents business from hiring for growth.

Commerce also contributes significantly to social inclusion by bringing opportunities to those with limited qualifications who often find it difficult to find employment. The sector invests heavily each year in training programmes to develop employees’ skills and competences.

The political will to tear down the remaining barriers to the European Single Market, rather than additional public expenditure, is needed to stimulate economic growth in Europe, promoting innovation and improving Europe’s global competitiveness.

We are long-standing proponents of a truly Single Market in products and services, for the benefit of con-sumers and long-term economic health. A vibrant and open Single Market is the best way to create jobs and move Europe out of crisis. There are still too many limitations on the free movement of goods and services throughout Europe. Some Member States are even erecting new barriers or discriminatory measures, limiting the capacity of businesses from elsewhere in Europe to establish in a given country or to grow their operations. This is a fundamental breach of the principles of the Single Market.

It is essential that the Single Market is developed in areas where it does not yet function properly. A firmer enforcement policy is needed to address the threat of protectionism in some Member States.

In a globalised economy, trade policy is pivotal in furthering Europe’s competitiveness and wealth creation. It is essential that we dismantle market access barriers, freeing up the trade in goods and services. Key measures to enhance predictability, legal certainty and transparency, together with the removal of red tape and technical barriers, are essential to increase our competitive strength.

The EU needs a stable multilateral framework for liberalised world trade to reach peak economic fitness. This should be complemented by effective bilateral and plurilateral trade agreements, providing additional opportunities for trade, job creation and growth.

A vibrant and open Single Market is the best way to create jobs

500m consumers

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… this ‘think-of-commerce’ should echo the ‘retail reflex’ included by the Commission in their European Retail Action Plan ; it should include a proper assessment of the impacts – deliberate and unintended – of policies on different distribution channels and formats of commerce.

A ‘think-of-commerce reflex’ in policy-making when considering new legislation or changes to existing legislation…

… wherever possible - multilateral, plurilateral and bilateral, promoting open trade in products AND services, removing regulatory burden, easing custom procedures.

International trade agreements should be advanced…

… so that European business can benefit from opportunities in the growing markets of India, China, Latin America.

Securing easier overseas establishment for EU retailers and wholesalers

… so that retail and wholesale can create jobs and offer career development.

Encourage Member States to reform their labour markets towards more flexibility and continuous skills development…

… for example the Services Directive, and no tolerance of ‘gold-plating’ at national level.

Strengthened enforcement of the Single Market principles and existing legislation

Removal of territorial supply constraints that hinder the free movement of goods.

To boost competitiveness and develop new opportunities, we need both the EU and Member States to apply an impact test for commerce when considering measures, especially on employment, the Single Market, and international trade rules :

See our policy papers on single market, on trade defence instruments, on trade agreements.

1

2 3

4

6

8

Harmonisation or mutual recognition of technical standards and requirements for product information, authorisation, and testing.

5

… using anti-dumping measures only as a last resort.

Removal of illegitimate anti-dumping measures (trade defence instruments)...

7

7

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3WE NEED SUPPORT FOR VOLUNTARY APPROACHES TO FAIR TRADING PRACTICES AND SUSTAINABILITY

The European retail and wholesale sector links producers and con-sumers every day. A fair relationship between all business-to-busi-ness partners in the supply chain is crucial for a stable supply of goods and services. Preserving flexibility and open competition in the supply chain drives innovation and improvement, benefit-ting consumers and ensuring the long-term health of suppliers and retailers. Any regulatory intervention has the potential to decrease these efficiencies. This is why EuroCommerce was a founding member of the Supply Chain Initiative, a voluntary approach to ensure fair business-to-business relations across the food supply chain. This EU-wide initiative has established harmonised core principles of fair dealing, under-pinned by decentralised mechanisms for conflict resolution, deliberately kept close to the disputing parties. Most major retailers and manufacturers have signalled their intention to sign up to the initiative. In the short-term it will provide an efficient framework to handle disputes. In the longer term it will yield a culture change in trading relations across the value chain.

Some supply chains are stable, simple, and local – carrots from a local farm at a local greengrocer. Others are dynamic, com-plex, and global – fashion items with fibre and fabric production, dyeing, styling and manufacturing by many different businesses, wholesaled and then sold through a number of retailers and channels. Guaranteeing product quality and safety, and tracing products and their components is then equally complex. More importantly, it has to be a shared responsibility between all actors in each value chain.

Retailers and wholesalers are working with manufacturers and producers to improve the environmental sustainability of the value chain, demonstrating how well functioning supply chains can innovate and deliver greater benefits to society while extending choice to consumers. Retailers have worked both on reducing the environmental footprint and increasing the resource efficiency of their own operations, and with suppliers to address impacts in manufacturing and production. Under the Retail Environmental Action Programme they have committed to initiatives aimed at reducing energy consumption, food and other waste, CO2 emissions and the carbon footprint of products.

Go to our website for more details on the Supply Chain Initiative and on the Retail Environmental Action Plan.

… so that fair trading practices in the food supply chain can be reinforced within a dynamic and innovative market. This is best assured by a voluntary system, which also accommodates the differing legal systems of Member States.

The Supply Chain Initiative should be supported and given time to succeed...

1

... this is a shared responsibility between all actors in the value chain ; retailers and wholesalers are playing their part in being responsible for product quality and safety; however, with tens of thousands of references and often only limited information, there are limits to what retailers can materially do.

Intensified dialogue within supply chains should clarify the respective and proportionate responsibilities of retailers and wholesalers in product safety, quality and traceability...

2

... voluntary initiatives driven by economic operators but with public scrutiny deliver real benefits ; they should focus on greenhouse gas emission reduction, resource efficiency, and the sustainability of food production.

Sustainability initiatives should remain voluntary and have positive cost impacts…

3

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… since the sector is essential to the health of the European economy and every local community. It is easy to take retail for granted as shops are part of the back drop of daily life. Yet there is much more to retail than meets the eye – talk to a store manager, visit a store and see its operations and the people who make them happen, meet retail executives and hear about the strategic and operational challenges they face.

… Wholesale is the hidden engine that provides services and know-how on products, improv-ing supply chain efficiency. See behind the scenes to hear how the sector supports job creation across the wider economy.

Last but not least : make the retail and wholesale value chain come to life for you by investing time in understanding its sophistication…

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This is

5.5m ENTREPRISES

in 4 enterprises* is in1 retail or wholesale

THIS IS RETAIL & WHOLESALE IN EUROPE

1 > Walmart2 > Carrefour3 > Tesco4 > Metro5 > Kroger6 > Costco

7 > Schwarz Group (Lidl and Kaufland)

8 > Aldi9 > Walgreen10 > Home Depot

EU RETAILERS ARE GLOBAL LEADERS(Top 10 retailers worldwide, 2011)

US retailers25%

European retailers38%

EUROPEAN RETAILERS ARE MORE INTERNATIONAL THAN AMERICAN

(% of top 250 retailers having established outside their home market)

*non-financial business economy Sources : Eurostat, OECD, Deloitte.

1.5X constructionmore than in

2X manufacturingmore than in

3X hotels & restaurantsmore than in

3.7m in RETAIL 1.8m in WHOLESALE

< 1%(> 250 people)

LARGE COMPANIES

> 99%(< 250 people)SMEs

10

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This is

29m JOBS

GROSS VALUE ADDED BY RETAIL & WHOLESALE

55%

€ 1tn

45%

in 7 jobs is in1 retail or wholesale

18.6m in RETAIL 10.4m in WHOLESALE

RETAIL & WHOLESALE

ADDING VALUE TO MANY OTHER SECTORS

manufacturingreal estate

finance agriculture

ICT transport

2/3(< 250 people)SMEs

1/3(> 250 people)

LARGE COMPANIES

4X ICT industrymore than in

(< 250 people)SMEs

(> 250 people)

LARGE COMPANIES

6X food industrymore than in

12X automotive industrymore than in

25X chemical industrymore than in

even farmingmore than in

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EuroCommerce Avenue des Nerviens 85, B-1040 Brussels

T +32 2 737 05 98 F +32 2 230 00 78

www.eurocommerce.eu

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