Research: Discounters may soon dominate the European FMCG market

Updated: May 8

According to new research by IGD an analytical company providing information and forecasts for the global retail grocery trade the discount channel is responsible for 43%. retail sales growth in Europe, and will increase sales by EUR 34 billion (US$41billion) in 2020-2022. Local leaders like Biedronka, Lidl, Aldi, Penny, Netto, BIM etc. are contributing to the growth across the channel. According to IGD, the discount channel will be a major contributor to growth until 2022, and leading discounters Lidl and Aldi will increase sales more than most major European retailers.

The seven Lidl stores are expected to grow by over EUR 900 million (US$1,100million) each in the next few years. The discount store will become the first European retailer with a turnover of more than EUR 100 billion (US$120billion). This number may be reached in 2021. Discount store is the second largest and fastest growing food retail channel in Europe. While it has been consistently gaining market share in recent years, the increased focus of buyers on price, accelerated by COVID-19, and the development of emerging markets in Eastern Europe, will place the channel at the center of the entire region, says Jon Wright, Head of EMEA, IGD.

Among the fastest growing discounters, the Russian Pyaterohcka (X5 Retail Group) is to be responsible for over 15% of the sales channel growth in the region. It is expected that in France, the increase in Lidl sales will be greater than in Germany, due to the limited number of direct competitors. In turn, for Aldi South, Great Britain will become the main factor contributing to the development of the group. While growth in this sales channel is slowing down in several mature markets such as Germany and the Netherlands, other countries such as Turkey, Russia, Poland and Romania could see double-digit growth, thus creating new opportunities for food and drink suppliers, says Maxime Delacour, Senior Retail Analyst at IGD.

In addition to large players, there are several market-leading small and medium-sized operators, such as Mercadona, Biedronka and several Scandinavian discount stores such as Kiwi, Tokmanni, Europris. These "local leaders" play a key role not only in their regional markets, but also create the conditions for growth throughout the channel, he adds.


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