Groceries discounters under pressure?

In Europe, discounters‘ shares of the groceries retail markets vary wildly from country to country.Looking beyond rather country-specific historical developments in groceries retail, the main reasons for these differences are likely in the purchasing power of the populations. Yet not in the way one would initially expect, with lower purchasing power leading to higher market shares for discounters – no, exactly the opposite is true: the higher the level of prosperity, the higher the market share of discounters. As a result, discounters are rare or non-existent in countries with low purchasing power, such as Bosnia, Belarus, and Albania.

Discounters have gained the highest market shares in Belgium and Germany, with 41% in both countries. Of course, it is generally well-known that Germany is the land of discounters. But even in other countries, German discounters are stirring up the market, with Aldi and Lidl on the front lines. For example, discounters have gained a foothold also in Denmark (37%), Norway (35%), and in Austria (29%).

At the tail end of the European market share ranking for groceries discounters are Italy (12%), France (10%), and the United Kingdom (only 8%). And elsewhere discounters are beginning to feel the pressure from the increasingly successful store brand strategies of ‘normal’ supermarkets. For discounters, this nullifies their unique selling proposition: ‘cheap’. Discounters are reacting by becoming more like ‘normal’’ supermarkets: wider product range, more fresh produce, an own bakery, pleasant atmosphere, etc. But in some countries, discounters have already hit the ceiling, generally said to be around 35%. This would mean that Germany, Belgium, and Denmark have already reached this limit.


Shop: RegioData Purchasing Power Data
Download this file (0515_RegioData_marketshares_of_Discounters_ENglisch.jpg)Download chart: Average Square Meter Turnover in Retail

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