Franck Laizet:

Franck Laizet: Selex has shown success over the course of the past several years. What are the factors driving that development?

Maniele Tasca:

Maniele Tasca: The most important factor is the quality of our companies. In 2005, our group consisted of 34 companies, and our market share was between 6 and 7 percent. Today, we have 18 companies, and our market share is 15.4 percent. In 2024, we generated more than €21 billion in annual revenue. Our companies have grown larger and stronger over the years. They have a deep understanding of their respective markets, and they employ highly skilled people. But what really sets them apart from the competition is their ability and their willingness to invest in growth—for example, in renovations of existing stores, new store openings, and new services.

The second factor driving the success of Selex is our organization’s ability to improve itself. Every company has its strengths, but each of them also has areas for improvement. The continual exchange of know-how, innovation, skills, and insights on opportunities brings our companies constant input and enables them to improve continually.

The third success factor I’d like to point out is our governance model. It gives individual companies autonomy in various operational areas while maintaining centralized management in certain key domains to create synergies. We centralize operations only where we can capture synergies without losing effectiveness. In areas in which we don’t centralize, our companies work together to achieve the best possible results.

Marco Catena:

Marco Catena: Which functions and decisions are centralized, and which are handled by subsidiaries independently?

Maniele Tasca: Procurement, for example, is centralized because scale strengthens our position in negotiations with suppliers. In contrast, assortment and category management remain in the hands of individual companies because they need leeway to reflect local needs in their offerings. However, while category management is handled independently by each company, we develop shared category management models at the group level that help companies improve their operations. Pricing is another example. As a strategic lever, pricing is managed independently by each company, but the Selex pricing tool is shared across the group. The same approach applies to marketing, customer relationship management (CRM), and human resources (HR). This center-periphery system works well in Italy, which is a unique market in many ways.

Franck Laizet:

Franck Laizet: How is Italy different from other European markets?

Maniele Tasca: The Italian market is highly fragmented. Consumer habits, demographics, tastes, product types, and competition differ from region to region, and retailers must reflect these differences to be successful. Local products are essential. In some cases, this means acting at the level of a single province. For example, a store in Puglia needs to offer a different assortment of taralli (wheat-based snacks) compared to what shoppers expect in Lombardy or Tuscany. Also, the local supplier landscape is very different from province to province. Campania, for example, has an unparalleled network of artisanal pasta makers.

But it’s not only the assortment that needs to reflect regional differences in demand and supply. Having the right store format for a specific area is also crucial. In general, hypermarkets have been losing market share in recent years, and we expect that this development will continue, but everything depends on the target market and the local competitive landscape. A hypermarket with a footprint of 5,000 square meters might be viable in one area, but another location might not support it.

When it comes to supermarkets, store sizes between 1,500 and 2,000 square meters offer the best balance in Italy. They generate robust revenue and have a manageable cost structure while providing room for a sufficiently wide and deep assortment—of about 15,000 stock-keeping units (SKUs)—to meet customer needs. The superette and proximity store segment, which is growing fast elsewhere in Europe, has certain limitations in Italy. Italy has relatively few large cities, and labor costs are a significant challenge. While proximity stores align with some long-term consumer trends, implementing them outside major urban centers in Italy is difficult.

Marco Catena:

Marco Catena: Given these limitations, how are you setting Selex up for future growth?

Maniele Tasca: With investments. Demographics are not driving demand, purchasing power remains low, and competition from specialty stores, e-commerce, and discount retailers is increasing. This could lead to a decline in average sales per store, which almost always translates into strong pressure on profit margins in our industry. To stay successful in this environment, grocers must have financial resilience and seek alternative sources of growth. For Selex, the key growth driver in the coming years will be investments in new capabilities. We will continue to focus on restructuring and modernization. In addition, we will keep opening high-quality stores and investing in services.

Another important source of growth is customer loyalty. The share of a customer’s spending captured by a single retailer remains relatively low in Italy. This means that there’s a significant growth opportunity within the existing customer base. Key levers include increasing penetration across different departments, expanding the range of categories purchased, and implementing strategies to increase average basket size and frequency. The challenge is that customers are becoming less loyal in general. They have more purchasing options, a wider choice of shopping channels, and a greater inclination to experiment with different brands. Retailers that pull the right levers to enhance customer loyalty can expect to achieve above-average market performance. In our experience, precise customer segmentation is essential, and we are determined to leverage all available data to maximize value.

Another area we are focusing on is store personnel. High-quality staff who can manage store operations effectively and build strong customer relationships have a big impact on store performance. However, the labor market has changed fundamentally, and finding the right people in retail, logistics, and foodservice isn’t easy. This is why we are intensifying our efforts to attract and retain talent, investing in training, and measuring employee satisfaction. Fortunately, our employee turnover rates are still low, but they are expected to rise, so it is important to anticipate this risk.

Franck Laizet:

Franck Laizet: In terms of innovation, what will be the key differentiating factors in the future?

Maniele Tasca: The most important factor is a strong fresh product offering, which is the primary driver for store selection. Many grocery retailers overlook the need for innovation in this area. From our perspective, a store must have at least a couple of points of excellence in its fresh product offering.

Another factor that I believe will be increasingly relevant is the specialization of assortment. At Selex, we have many stores across different territories, each serving structurally distinct customer bases in terms of demographics, age, habits, and purchasing power. Our assortment strategy reflects not only store size but also the specific characteristics of the local customer base.

Further differentiation will be driven by the integration of fresh food offerings with foodservice. We are increasingly incorporating foodservice solutions, such as ready-to-cook meals, into our stores because we are convinced that out-of-home consumption will continue to grow in the coming years.

Franck Laizet:

Franck Laizet: To what extent will multinational grocers negotiate with suppliers at the European level in the future?

Maniele Tasca: Currently, consumption patterns are still quite diverse across Europe. This limits the possibilities for joint procurement. Also, there is substantial resistance to centralized negotiations on the part of suppliers. But, over time, negotiations will move toward the European level. I expect that multinational discount players will lead the way. Eventually, growing competitive pressure will push all market participants to follow suit. Both suppliers and retailers will have to set themselves up for this new era.