Updated: Jun 7
Discount Retail Chain Lidl Hungary (owned by the German Schwarz Gruppe) beat everyone in 2020 and irrespective of the fact whether one likes the discounter channel or not, the business results and the successful strategy need to be appreciated. One year earlier it was already visible how dynamically Lidl was going forward, but back than 12 months weren’t enough. This time Lidl has taken the 1st place in the ranking with a significant advantage. It must also be mentioned that Lidl isn’t only the first in Trade magazin’s retailer ranking, but also in GfK’s market share report, with a nearly 15% share. None of the retail channels was able to grow as much in 12 months as discount supermarkets, and GfK says the channel’s market share has already exceeded 30% in Hungary, this makes discounters the No.1 retail channel today.
It is important to underline the fact that the No.2 spot also went to a different retailer than last time, as for the first time SPAR won the silver medal. In SPAR’s case we can also talk about a good business strategy, as the company has been successfully working on bringing out the most in the market for years by following a well-made plan. Then retailer keeps investing a lot of money in expansion, development, serving customers and improving the shopping experience, and this hard work finally bore fruit. What is more, they managed to achieve this result in an environment where the hypermarket channel has been losing market share for years and this was also true for last year. This makes it even more important that SPAR has been paying special attention to the expansion of various small-size store formats too, the number of which increased greatly last year, as it is indicated by this year’s retailer ranking.
Unfortunately the difficulties of former years continued for Tesco and the Covid-19 pandemic only made matters worse for hypermarkets, so practically there was no change in Tesco’s sales turnover and in the light of the channel’s 2-3% contraction, it would also be a good result if sales declined by 1-2%, but our estimation was a little bit more positive than this.
As for the ‘trios’ of discounters (Lidl, Aldi and Penny), Hungarian-owned retail chains and drugstores, the market shares and rankings didn’t change within the channels, so the ranking is only different in the trio of hypermarkets.
Small corner shops that could change their product selections quickly as a reaction to the new conditions saw their opportunities grow last year, because during the pandemic shoppers didn’t want to visit large stores and they didn’t wish to spend a lot of time with shopping. Due to the fewer store visits, shoppers opted for a larger size in several product categories and they also purchased bigger quantities.