Discount Variety Retail Chain Action was purchased early last decade by Britain’s oldest private equity firm 3i, even those involved in the deal had little inkling it would become one of the most successful leveraged buyouts in history. One former executive who worked on the 2011 takeover of Action, which sells cheap products from towels to toilet cleaner out of retail parks, remembers looking around its warehouses and seeing piles of “very dusty old stock”. But the takeover of an unassuming chain of bargain stores has proved 3i’s redemption trade, rescuing a storied buyout firm from growing irrelevance after a painful restructuring and making eye-watering returns for its shareholders in the process. The firm, which in recent years has added to the majority stake it bought in 2011 for £114mio, now values its investment in the retailer at almost £15bn. Action has driven a more than 1,000%t rise in 3i’s shares as the retailer’s value has ballooned to account for 66% of the firm’s portfolio by value, and has returned at least £2.9bn in cash to its controlling shareholder. “It’s the gem in their portfolio,” said a former 3i partner. However, not everyone thinks the rally is deserved. ShadowFall, the hedge fund that shorted the now-defunct fraudulent German fintech Wirecard, has built a multimillion-pound position against the firm because it believes its valuation of Action is too high. The debate around Action’s valuation has underlined how 3i’s future, and that of its chief executive Simon Borrows, are intimately linked to the retailer’s success and raised questions over what the buyout firm might become, with or without its star asset. “Shareholders are now essentially buying 3i as a proxy for Action,” said Haley Tam, senior equity research analyst at UBS. 3i declined to comment. By the time Borrows was promoted from chief investment officer in 2012, the FTSE 100 company, which was founded in 1945 at the request of the UK government to support war-stricken businesses, had 124 investments in small to medium-sized companies and offices across the world. “When I first joined, 3i was completing a transaction every working day of the year,” said the former executive, who joined the firm in the 1990s. “It was just an extraordinary volume machine.” But Borrows, a former investment banker who advised on 3i’s initial public offering in 1994, whittled the group down, closing offices from Barcelona to Hong Kong, cutting more than a third of staff and restricting new deals to northern Europe, North America and, to a lesser extent, Brazil. Within three years the number of companies in 3i’s portfolio had almost halved to 65, with some sold at a loss, while the group’s credit business was sold in 2016. In 2015 Borrows put an end to third-party fundraising because the firm’s aim of investing in up to seven new targets a year left it with “no compulsion” to seek money from outside investors. Meanwhile 3i had been growing Action, which had operated 250 stores across the Netherlands, Belgium and Germany when the group bought it. Sales at the retailer, which now operates more than 2,300 stores in 12 European countries, rose from €1.2bn to more than €11bn in the decade to March 2023.  Action’s returns to the investment firm have largely been funded by the retailer taking on additional debt. The Financial Times reported this summer that 3i was set to receive another payout of at least €1.1bn as Action worked to raise new leveraged loans worth more than €2bn. 3i’s headquarters in London. 3i values its stake in Action at £14.8bn © Anna Gordon/FT The buyout group recently increased its stake in the retailer from 55 per cent to 58 per cent. Executives at 3i last year received £735mn in carried interest solely relating to the group’s investment in Action. Borrows, who does not receive carried interest, was paid more than £7.5mn in bonus and long-term incentives as well as a £700,000 salary for the financial year. 3i now values its stake in Action at £14.8bn. But Matthew Earl, managing partner of ShadowFall, told the FT he believed the implied Action valuation of 18.5 times operating earnings before interest, tax, depreciation and amortisation was too high. He added the price of 3i’s shares implicitly attached an even higher multiple to the retailer. Earl said he believed the retailer had benefited disproportionately from high inflation because it buys half its inventory months in advance, an advantage that would fade as price rises subsided. He also questioned how much the chain could further expand in France, a “saturated market”. Many remain bullish, and are not convinced by the thesis of ShadowFall’s short position. Clive Black, head of consumer research at Shore Capital, said Action was a “formidable business and it hasn’t gained the valuation it has through market manipulation, it has done it through exceptionally strong sequential growth”. The discount chain may have benefited from “a short-term tailwind in [profit] margins from inflation”, Black added, but “it’s not just Action, inflation has been everywhere, Action used it well”. Sales at Action rose from €1.2bn to more than €11bn in the decade to March 2023, which increased its price target for 3i days before ShadowFall’s position became public, subsequently argued that the valuation was “cheap when factoring in faster-than-peer growth” and that most of Action’s store growth was expected to be outside of France. But regardless of Action’s valuation, the more important question for some is what 3i’s purpose is, whether it keeps or exits the asset. Michael Sanderson, director in equity research at Barclays, said shareholders in 3i were “buying a business that is heavily exposed to Action’s development”, whereas 10 years ago it was “building value by . . . buying companies and growing them and selling them on after a short time period”. He was positive about 3i and Action overall, but added there were “undoubted questions about what the long-term plan is, given [Action] is such a large part of 3i right now” and that the retailer had “got to such a scale now, there are very few options” for exiting it. For the former 3i executive, the group’s non-Action portfolio “is now not of a scale that it probably survives on its own”. They added that 3i had “become a victim of Action’s success”. The need to diversify appears not to be lost on 3i, whose executives have pointed to other portfolio companies that could be their next success story. 3i designated Royal Sanders, a European producer of personal care products, to its “longer-term” assets last year. It has also highlighted Netherlands-based bread and snack producer, the European Bakery Group, as a strong performer in recent years. An Action store in Bruay-la-Buissière, northern France. A former 3i partner suggested the group would keep the chain ‘as long as they can’, but questioned just ‘how much of the juice is left’ in the retailer “A number of assets have the potential to become longer-term compounders like Action,” Borrows said in May. “We’ve obviously learned the benefits of holding things for longer,” he said last month, adding that the group’s 2015 sale of global material-testing laboratory network Element had been too early because it had “continued to grow significantly” since. The buyout group is also looking to make two or three investments a year in software and services companies, to add to an overall “non-Action portfolio” that it recently said had both strong and weak-performing assets. Despite Action’s continued growth, the former 3i partner suggested the group would keep Action “as long as they can”, but questioned just “how much of the juice is left” in the retailer. As for what the firm would be without Action, the person suggested 3i might regret selling the credit arm given the private debt market boom. “Simon’s probably looking at Action as his swan song,” they said. “After that he goes off. There isn’t anything else.” 3i still manages third-party capital in its infrastructure strategy but the former executive said the decision to stop raising more third-party funds in private equity might also hinder its pursuit of the next Action. “If you can’t raise third-party funds, it’s very difficult to be a private equity firm these days,” they said. Borrows has, however, pointed to the lack of pressure to return cash to external investors as a strength that will allow 3i to hold portfolio companies for longer. Some observers, though, do not hold much faith in it repeating its success with Action. “Being the next Action is really, really hard,” said Sanderson at Barclays, adding that the prospect of another investment doing as well was “almost impossible”. Read more: 3i searches for next ‘gem’ as short seller circles #smartdiscount #action #netherlands #3igroup #3i #hf #uk #expansion #growth #development #drc #discount #retail #consulting #discountretail #discountretailconsulting #retailconsulting #google #privateequity #value #revenue #europe

Discount Retail Chain Aldi USA is planning 600 new stores in the USA by 2030, despite Donald Trump's trade war. While Aldi in Germany can hardly be distinguished from a classic supermarket in terms of price and appearance, the discounter is celebrating a surprising success in the USA as a low-cost supplier as in its early days. With affordable private labels, lean processes and a minimalist shopping experience, Aldi is apparently hitting the nerve of the times. In the past, the US branch of Aldi Süd in the USA was ridiculed for its spartan stores and the 25-cent coin for the shopping cart. Today, Aldi is one of the fastest-growing retailers in the country, with around 100 new stores per year, according to the "Grocery Report 2024" by real estate service provider JLL. In March, the discounter announced that it wanted to push ahead with expansion even faster. The goal is to become the third largest supermarket chain in the USA by the end of 2025 with 2600 stores - behind Walmart and Kroger. There are currently 2400 Aldi stores. American boss Jason Hart held out the prospect of another 600 stores for the next five years. In addition, there are even branches of Aldi Nord, which do not operate under the Aldi name in the USA. Aldi Nord has been operating the Trader Joe's chain since 1979. This raises questions for the German market. In the USA, Aldi relies on virtues that once made the discounter great in Germany: low prices, a clear assortment and efficient processes. Around 90 percent of the products are private labels, which can keep up with branded products in terms of quality, but are significantly cheaper. An example: While a pack of "Fruit Rounds" breakfast cereals costs 1.68 dollars at Aldi, the branded product "Froot Loops" costs 4.48 dollars. "Can't open the stores fast enough" The current economic conditions in the USA are benefiting Aldi. Food prices have risen by a good 20 percent in the past four years. Tariffs on imported goods such as fruit, vegetables and rice are driving up costs even more. While traditional supermarkets often pass these costs directly on to consumers, Aldi manages to keep prices stable or even lower them. For example, the discounter reduced prices for a quarter of its range in the summer of 2023. The market power of the food giant vis-à-vis the manufacturers is also likely to play a role. "After years of inflation, Americans' money is tight," the New York Times quotes the head of Aldi in the USA, Dave Rinaldo. "We are in a time when demand is so high that we literally can't open the stores fast enough." By concentrating on private labels, Aldi is well prepared for this development. Customers have to pack their purchases themselves and the goods are often presented directly in the boxes of the wholesale deliveries. These simple measures save costs. The stores themselves also contribute to the success. With an average area of 2000 square meters, they are significantly smaller than the often huge US supermarkets. This also saves costs and at the same time makes shopping clearer for customers. Instead of an overwhelming assortment of up to 30,000 items, as can be found in a typical American supermarket, Aldi offers a compact selection of an average of 1600 products, according to the "Economist". Lidl lags behind Aldi The fact that the basic idea of the German brothers Theo and Karl Albrecht, who founded Aldi in the 1950s, the world's first ever food discounter, is still a successful model, is also shown by the continuously increasing number of customers in the USA. According to an analysis by PlacerAI, Aldi recorded seven percent more customers in the first half of the year than in the previous year, while classic supermarkets had only 1.8 percent more. Is the German discounter conquering the American food market landscape with its concept, as the Wall Street Journal recently headlined? "Aldi has been active in the US market since the 1970s and is therefore no longer a 'flash in the pan', but a player to be taken seriously," says food retail expert Carsten Kortum. The special thing is that he "has developed a clearly defined, radically simple discount model at its core – and then adapts it to the conditions in the respective countries with astonishing flexibility depending on market conditions." While Aldi is taking off in the USA, the second major German discounter is struggling with challenges. "With only a little more than 190 stores, Lidl is significantly smaller than Aldi. Lidl is having a harder time, expansion has been more hesitant and some locations have even been abandoned," says Kortum, Professor of Business Administration and Food Retail at the Baden-Württemberg Cooperative State University. The message that US consumers want a clear discount alternative to the classic supermarket has been received. In New York, Lidl advertises with the "Lidl-est prices", a play on words with the brand and the English word for the lowest prices. Nevertheless, the company, which positions itself between discounter and supermarket, remains a "big experiment with an unclear outcome" for the expert. If the turnaround does not succeed, he believes that an exit from the US market is even possible. Discount is not everything "hybrid formats" are the future The success of Aldi in the USA is also the result of a learning process, as Kortum emphasizes. Both chains had to learn in the USA "that the purely German discount approach does not automatically work there". Aldi has also invested in improving the appearance of its stores and food quality in recent years, with "more freshness, more brands and more convenience", i.e. processed foods that save time in preparation. The design of the stores is also more American today. Kortum therefore considers a return to the purist discounter of the 1970s to be unlikely for Germany. The wheel cannot be turned back, according to the expert. Over the years, customers in this country have learned to expect quality, organic products, regionality and brand diversity from discounters. The German market is extremely saturated, competition is intense and market shares are relatively fixed. Aldi and Lidl had to react: with more fresh food counters (without service), larger stores, private labels with premium standards, new convenience assortments and more modern store concepts.  In the expert's view, however, "hybrid formats" are conceivable in Germany in the future: "Aldi and Lidl could run smaller, highly price-oriented formats in parallel to their modernized stores, for example, for very price-sensitive target groups or in economically weaker regions." In a way, this is already visible in the test formats of the discounters: Lidl is testing non-food special formats and Aldi Süd is experimenting with city stores. The development towards "supermarket with discount DNA" is irreversible. "But selective returns to the hard price discount are possible, especially if the economy continues to weaken or certain customer groups pay more attention to the penny again." Read more: Warum Aldi trotz Trump die USA zum Wachtumsmarkt erklärt - Capital.de #smartdiscount #aldi #usa #expansion #jll #consumers #lidl #growth #drc #discount #retail #consulting #discountretail #discountretailconsulting #retailconsulting #google

Online Retail Chain Meituan opened its first discount store in Hangzhou, China. The discount format has the brand name is "Happy Monkey". The Happy Monkey store covers an area of less than 1,000 square meters, and there are currently more than 1,000 cost-effective essential food products. According to the Qianjiang Evening News, Happy Monkey will take the opening of the first store as an opportunity to continue to optimize and build, and continue to meet the consumer needs of the community for three meals a day with high quality and deep discounts. On the same day, Alibaba's Hema Affordable Community Supermarket, Hema NB was officially renamed "Super Box NB", and a total of 17 Super Box NB were opened in Shanghai, Hangzhou, Nanjing, Ningbo, Shaoxing, Suzhou, Nantong and other places on the same day. "As of the end of August, the overall number of Superbox NB (including the original Hema NB stores that have been renamed) has approached 300." According to the person in charge of Hema, Hema NB has opened street-facing shops in Jiangsu, Zhejiang and Shanghai residential communities in the past two years, with an area of 600 square meters or 800 square meters, which also serves three meals a day for families, and the business categories cover about 1,500 products in four categories: fresh, sustainable, standardised and frozen products. A person close to Hema told Phoenix WEEKLY Finance that NB's new format can be regarded as it has entered a mature stage from the incubation and cultivation period, and will enter a stage of rapid development as an independent brand. A day later, on August 30, JD.com opened four discount supermarkets in Suqian, Jiangsu Province at the same time, with four new stores covering an area of more than 5,000 square meters, covering more than 5,000 SKUs (the smallest unit for managing and tracking commodity inventory) such as daily necessities, fresh food, FMCG, and alcoholic beverages. The four JD discount supermarkets showed strong attraction on the first day of opening, receiving more than 300,000 customers in a single day, and launched flow restriction measures since opening at 9 a.m. and lasted until 0:30 a.m. At the same time, the popularity of discount supermarkets has also brought huge customer flow to shopping malls, and the four JD discount supermarkets have attracted more than 3 - 4 times the daily customer flow for their shopping malls. According to the person in charge of JD.com Discount Supermarket: "JD.com has not recently entered the hard discount track, as early as more than a year ago, JD Huaguan Discount Supermarket has carried out a pilot in Fangshan, Beijing, and opened two stores in Fangshan and Doudian, Beijing." Previously, the first store of JD Discount Supermarket in China opened in Zhuozhou, Hebei Province on August 16, which also triggered an offline consumption boom. For a time, the competition between Meituan, Alibaba, and JD.com, the three leading Internet companies, extended from takeaway to offline retail, and "hard discounts" would be the next outlet? It is a minimalist business that does not sell the deadline Speaking of "discount retail", the first thing that more consumers think of is discount stores such as Good Sale and Hi Special Purchase. Founded in 2020, Good Sale has achieved a magnificent turnaround from a start-up to an industry leader in just a few years. According to public information, as of July 2025, the number of its stores has exceeded 950, and its annual sales have soared 200 times to 10 billion yuan in three years. Zhang Ning, the founder of Good Sale, revealed to "Tianxia Netshang" in 2024 that 60% of the supply of Good Sale is tail goods, mainly from brands, first-level dealers or brand-designated dealers (tail products may have expiration problems), and the other 30% are some goods produced by surplus production capacity, packaging replacement, IP authorization expiration, etc., plus a small number of OEM products. Behind the rapid growth of good sales is the booming discount retail market According to the "2025 China Retail Industry Outlook", the size of China's hard discount market has exceeded 200 billion yuan in 2024. Looking at the world, data released by consulting firm Nielsen IQ shows that the incremental sales share of global discounted products will increase by $6.11 billion in 2024, and the global discount retail channel will increase by 8.2%, second only to social e-commerce (such as Douyin and Kuaishou) and discount e-commerce (such as Pinduoduo). "Traditional supermarket procurement is mainly through dealers and distributors. Under such a distribution system, a lot of commodity circulation costs have been increased, and after the middlemen have increased the price layer by layer, the pricing of the goods is higher, and a complex distribution relationship has also been formed. Bao Yuezhong, chairman of Baum Enterprise Management Consulting, mentioned that unlike "soft discounts" to achieve low prices through the sale of tail goods and expiring food, hard discounts are closely connected through supply chain optimization to achieve sustainable low prices. "We often talk about triple drive, that is, the actual cost of manufacturing may only account for about 30% of the price of goods." Marc Houppermans, executive partner at DRC Discount Retail Consulting GmbH and former Aldi manager revealed that most of the rest are occupied by advertising, endorsements and other expenses. Most consumers prefer to buy the product itself rather than the brand premium. Choosing to cooperate directly with manufacturers and eliminate intermediate price increases can achieve price breakthroughs under the premise of ensuring quality and complete the commercial closed loop of "de-premiumization". The person in charge of JD.com Discount Supermarket said that backed by JD.com's strong supply chain system, JD.com Discount Supermarket has achieved direct procurement and direct delivery of a variety of characteristic commodities, superimposed on the development of its own private label brands, and eliminated the premium of intermediate links to the greatest extent. Not only in the supply chain, but behind the ultra-high cost performance is the difference from the traditional minimalist business model. "In addition to optimizing the supply chain at the source of goods to reduce costs and lightweight packaging, the store also follows minimalism from the way employees work to the decoration style." The person in charge of Hema told Phoenix WEEKLY Finance that Hema has also effectively controlled costs through standardization, digitalization, and AI intelligence, and actively lowered gross profit, and finally presented customers with high-quality-price products. Hema NB's strategy of achieving lower prices through its own brand has begun to bear fruit. According to the financial report, Hema's GMV (total merchandise transaction value) in the first quarter of fiscal year 2026 reached 75 billion yuan, achieving annual profit for the first time, of which fresh and NB formats contributed more than 80% of revenue. Competition is still outside the price This is not a business war with "low price" as the only criterion, in DRC Discount Retail Consulting executive partner William Snollaerts view, this is a comprehensive test of merchants' ability to select and control products, supply chain capabilities and service capabilities. In fact, in 2024, Hema NB has competed with German hard discount retail company Aldi in the Shanghai community discount track. Aldi focuses on the advantages of business districts, minimalist SKUs and supply chains, while Hema NB relies more on residential concentration areas, category diversification and big data technology advantages. The interview with "Phoenix WEEKLY Finance" found that at present, Happy Monkey, Super Box NB, and JD.com Discount Supermarket all adhere to "high quality and low price", and the target population covers migrant workers, young people, the elderly and small families. "This strategic positioning is more suitable for contemporary Chinese families, that is, the scale is getting smaller, the mainstream family structure of three has weakened the dependence on large-sized goods, and the Chinese people have always preferred fresh ingredients and have fewer hoarding habits." The person in charge of a traditional supermarket told Phoenix WEEKLY Finance that from the current point of view, the three have certain differences in business positioning. Super Box NB has about 1000 - 1500 SKUs, and the business area is controlled at 1000 square meters, continuing the previous style of play, which belongs to small and medium-sized supermarkets; JD Discount Supermarket focuses on "large store type and multiple SKUs", with a business area of more than 5,000 square meters and more than 5,000 SKUs. "Compared with the scale of traditional supermarkets of tens of thousands of products, they all maintain the ultimate restraint." In the view of the person in charge of the above-mentioned traditional supermarket, the above-mentioned three, or the same as the previous community hard discount retail play, while maintaining the stability of core products, through quarterly updates of basic models and seasonal new products, to achieve a dynamic balance of the commodity structure. "For e-commerce platforms, opening offline discount stores can help increase new channels to reach consumers." William Snollaerts said that the supply chain, brand, and data advantages of e-commerce platforms are what traditional supermarkets need to catch up, "Relying on the massive data accumulated online, e-commerce platforms can more accurately analyse the needs of regional consumers, so as to support the accurate selection of products and rapid product iteration of offline stores." ” Marc Houppermans said that relying on data technology to accurately predict consumer demand, optimize inventory management, reduce losses, and rely on strong cold chain distribution capabilities to achieve efficient circulation of fresh goods. It is worth noting that the hard discount track is on the rise, not only on e-commerce platforms, but also on traditional retail represented by Wumart is also turning to hard discount formats. "The key to the 'hand-to-hand combat' of the community discount business is who can better balance cost, efficiency and consumer experience." The above-mentioned person close to Hema told Phoenix WEEKLY Finance that it is difficult to say who is "dominant" at present, or will jointly promote hard discount retail into a new stage. Read more: Meituan, Alibaba, and JD.com 's "war" has been upgraded to -36 Kr #smartdiscount #china #expansion #asia #growth #hd #harddiscount #hema #jdcom #jd #happymonkey #jddiscount #superboxnb #nb #meituan #aldi #pinduoduo #Douyin #Kuaishou #wumart #phoenix #drc #discount #retail #consulting #discountretail #discountretailconsulting #retailconsulting #google #GoodSale #HiSpecialPurchase

Discount Retail Chain will advance rapidly in South America. According to the Deloitte study "The advance of the hard discount. Evolution and perspectives towards 2030", this retail format already concentrates more than 30% of modern retail in Mexico and aims to dominate up to 40% of the regional market by the end of the decade. Just a decade ago, the phenomenon of hard discount stores seemed limited to Europe, with giants such as Lidl and Aldi dominating the market in countries such as Germany and France. Today, however, the story is different: Latin America not only adopted the model, but accelerated it and transformed it into a pillar of daily consumption. According to the Deloitte study, The Advance of the Hard Discount. Evolution and prospects Towards 2030, the region is experiencing a true retail revolution that impacts both consumers and large chains. Colombia, Peru, Mexico and Chile concentrate the fastest progress, although the model is already beginning to permeate Central America and the Caribbean. What is the hard discount? The Deloitte study explains that the hard discount is a retail format based on the sale of basic products at significantly lower prices than in traditional supermarkets, without depending on promotions or loyalty programs. To achieve this, it is based on four strategic axes: Operational simplicity: small shops, no additional services. Obsessive cost reduction: optimized logistics and cost control. Limited and focused assortment: prioritizing essential categories. Own brands: with a good price-quality ratio to legitimise the perception of value. The model was born in Germany further tested and adapted in Turkey, and landed in Latin America in 2005 with Tiendas 3B in Mexico and later in 2009 with the opening of D1 Stores in Colombia, and since then it has shown that "less is more" can also be a powerful expansion strategy. Hard Data: Growth in the Region According to the Deloitte report, the phenomenon reached a startling magnitude in just over a decade: Colombia: Hard discount stores accounted for 21% of the share in supermarkets in March 2022. Tiendas D1 displaced Almacenes Éxito as the leader in retail sales in 2021, with a growth of 32% that year. Today, D1 has nearly 4,000 stores. Peru: In 2022, more than 600 discount stores exceeded 11% of modern channel sales. The Mass chain reached more than a thousand stores in record time, and its owner Intercorp is already exporting the model to Chile. Mexico: the most surprising case. In 2022, hard discounting represented just 2.3% of grocery sales, but today it dominates 30.5% of modern retail. Between 2022 and 2024, sales in the sector went from $29.707 billion to $38.864 billion, according to GlobalData figures cited in the Deloitte study. Brazil: the hard discount mutated into an attack format (a mixture of wholesale and self-service). Chains such as Assaí and Atacadão grew by double digits. However, not all bets are prospering: Spain's DIA left the country in 2023 after failing to achieve profitability. Mexico: from laggard to regional protagonist Although the Deloitte study indicates that Colombia leads in penetration, Mexico has become the most dynamic market with the greatest potential. The Mexican case is marked by an aggressive expansion of local players: 3B stores: founded in 2005, they were consolidated after a dizzying growth in recent years. In the third quarter of 2023, 191 branches opened, with plans to reach 20,000 stores through investments ranging between 1,400 and 1,600 million pesos per year. In 2023 they reported revenues of 41,090 million pesos (+29.4% compared to 2022). Neto Stores: operate with more than 1,700 branches in at least 20 states of the country. Bara, from FEMSA: The company announced that it will accelerate its expansion to compete directly with discounters. Walmart's Bodega Aurrerá: represents 80% of its stores in Mexico, and in 2022 received 40% of its capital budget (27,600 million pesos) for remodeling and expansion. According to Deloitte, Mexico's success is explained by a combination of factors: high price sensitivity, persistent informality and a cautious consumer who prioritizes value over experience. The keys to the model, according to Deloitte The report highlights three factors that have been essential for the hard discount to become a model of success: Accelerated territorial expansion: chains grow "in a spot", opening stores close to each other to take advantage of economies of scale. Customer proximity: settling in popular neighbourhoods and small municipalities, taking ground away from traditional neighbourhood stores. Legitimization of cheapness: thanks to the development of quality own brands, the stigma that "low price equals poor quality" was broken. Opportunities and challenges towards 2030 Deloitte projects that the hard discount could capture between 15% and 40% of the retail market in different Latin American countries by the end of the decade. The clearest opportunities are: Expansion to rural and semi-rural areas. Digitalization and technological adoption to improve logistics and productivity. Sustainability and energy efficiency as a competitive advantage. However, the study warns that the model is not without risks: it requires large initial investments, and if the minimum scale is not achieved, it may fail (as in the case of DIA in Brazil). According to Deloitte, the hard discount went from being a "niche format" to becoming a strategic pillar of Latin American retail. It has changed shopping habits, forced the giants of the sector to reinvent themselves and opened up new investment opportunities. The slogan of "good, beautiful and cheap" is no longer a cliché to become the winning retail strategy of the decade. Read more: Hard discount revolutionizes retail in Latin America - Retailers - Business & Technological Innovation #smartdiscount #southamerica #mexico #colombia #peru #equador #BBB #tiendas3B #isimo #tuti #neto #mass #tiendas3b #ara #drc #discount #retail #consulting #harddiscount #hd #deloitte #discountretail #discountretailconsulting #retailconsulting #google #expansion #growth

As shoppers feel the pinch they adapt. In South Africa 42% of the Top 40 categories shoppers shifted their spend to bigger pack sizes to get a better bang for their buck. In 33% shoppers switched to smaller packs to take advantage of the lower price point needed to make their purchase, and in 25% there is no noticeable change. Manufacturers must offer a broad range of pack sizes to capture the maximum demand. Source: NielsenIQ - Retail Measurement #smartdiscount #consumer #patterns #shopping #behaviour #categories #small #big #large #pack #inflation #harddiscount #hd #drc #discount #retail #consulting #discountretail #discountretailconsulting #retailconsulting #google #nielseniq #southafrica #ksa

Discount Variety Retail Chain Akitoki, a Chinese 'Action' format, opened its first store, located in the north of the Capital Bogota. It has generated great expectation, although some consumers question whether its prices are really as low as those of its competitors. The arrival of low-cost stores in Colombia has generated a radical change in the shopping habits of Colombians. During the pandemic, consumers turned to establishments such as D1, Ara and Dollarcity, looking for essential products at affordable prices, in a complicated economic context. Now, a new competition is emerging in the retail market: Akitoki, a chain from China that promises to offer low prices and a wide variety of products for the home, clothing, toys, and more. With this low-price approach, the brand has already been dubbed the "Chinese Dollarcity" by many consumers. Its first store, which opened in the north of Bogotá, more specifically on Calle 166, between Autopista Norte and Carrera 19, has quickly positioned itself as an attractive option for those looking for basic items and everyday products without spending a lot of money. Prices at Akitoki start at $5,000 for small items, while clothing costs from $60,000. In the assortment of clothing you can find jackets, pants, t-shirts, shirts, socks, dresses and sports sets, among other products. The store also offers a variety of household products, such as ovens, pots, plates, shelves, and ornaments. In addition, there are pet supplies and a party décor section, making it a one-stop option for shoppers looking for budget-friendly solutions for their home. Will Akitoki be able to stand up to its competition? Competition in the retail sector in Colombia is not easy. Dollarcity, which has been operating in the country since 2015, has 345 stores in various cities, consolidating itself as one of the strongest players in the low-cost market. The chain has managed to open new stores in places such as Cartagena, Fusagasugá and Carmen de Bolívar, which has allowed it to expand its presence in the country considerably. This success is due to its strategy of offering accessible products to Colombian families, which has generated a loyal customer base. For his part, Akitoki faces several challenges. Despite its similar offering to Dollarcity, some consumers have pointed out that Akitoki's prices are a bit higher than those of its competitors. In addition, the fact that it only has one store in Bogotá could limit its reach to a wider audience, compared to chains such as Dollarcity, which already has a presence in multiple cities. On social media, some shoppers who have already visited Akitoki have shared their impressions of the store. A content creator on TikTok, for example, showed on her account the prices of garments such as jackets and sports outfits, highlighting that the store offers a variety similar to that of traditional "Chinese locals", but at more competitive prices. However, some followers of the publication also mentioned that, despite the good offers, it is still early to make a fair comparison with Dollarcity, as Akitoki has a long way to go. The truth is that, if this new store manages to successfully establish itself in more cities in the country, it could become a serious competitor for the chains that currently dominate the low-cost market. For now, the competition with Dollarcity and other Colombian retail giants is clear, and as more stores open in Colombia, consumers will continue to be the main beneficiaries of this low-price boom, which will likely alter shopping dynamics in the country for years to come. Read more: This is the new "Chinese Dollarcity" that arrived in Colombia: it has cheap prices and will compete against D1 and Ara - Infobae #smartdiscount #colombia #akitoki #expansion #action #growth #development #introduction #startup #international #chinese #china #variety #action #dollarcity #d1 #ara #harddiscount #hd #drc #discount #retail #consulting #discountretail #discountretailconsulting #retailconsulting #google

Discount Retail Chain Lidl UK has secured a major investor-backed deal to support the construction of 35 new stores across the UK and Europe, marking a significant shift in its approach to property development. The portfolio, which includes 17 UK supermarket sites, is currently under offer from global investment firm ICG for more than €250 million (£215 million), according to The Grocer. Once construction is complete, all stores will be leased back to Lidl under a sale-and-leaseback agreement. This approach mirrors Lidl’s first UK deal of this kind, struck with Roadside Real Estate in October last year. Traditionally, Lidl has focused on building and owning its sites outright, but the move towards leasehold arrangements indicates a new strategic direction aimed at speeding up its store rollout. The deal is expected to complete within the current financial year A spokesperson for Lidl International said: “The qualitative and quantitative expansion of our network of stores has always been a key driver for the sustainable growth of our company. As a matter of principle, we do not focus on short-term developments, but always think long-term, economically, and sustainably. In particularly promising market situations, we consciously decide to develop properties and projects together with partners and investors.” The news comes as Lidl pushes ahead with plans to open over 40 new UK stores this financial year, with a long-term goal of reaching a 1,500-strong estate across the country. By tapping into investor capital, Lidl is reinforcing its commitment to rapid growth while balancing flexibility in its property portfolio, a move that could reshape how the discounter expands in increasingly competitive markets. Read more: Lidl Strikes £215m Investor Deal to Accelerate Store Expansion #smartdiscount #lidl #uk #financial #deal #icg #capex #harddiscount #hd #drc #discount #retail #consulting #discountretail #discountretailconsulting #retailconsulting #google

Discount Retail Chain Lidl brings Arnold Schwarzenegger back in the spotlight for PARKSIDE, the DIY private label brand exclusively from Lidl, with the new chapter of the "You can do it!" campaign, joined this time by actor and former bodybuilder Ralf Moeller, known to the general public for his role in Gladiator. With irony and lightness, the two German and Austrian born Hollywood stars bring a breath of energy to the world of DIY, encouraging both experienced hobbyists and beginners to try their hand at their home projects. The key message is clear: with PARKSIDE, anyone can create, regardless of experience or budget. "From Terminator to Motivator: the partnership with PARKSIDE is made for me. No project is too complicated, no challenge too big: you just have to want it and believe in yourself," says Arnold Schwarzenegger, emphasizing the motivational nature of the campaign. At his side, Ralf Moeller talks about his passion: "DIY is really great. Creating with your own hands and seeing the final result is a unique feeling. I am happy to be part of this initiative, because I have always loved the world of DIY". The bond between the two actors, long-time friends, is perfectly reflected in the values shared with PARKSIDE: determination, authenticity and practical spirit. The campaign wants to convey that you don't need to aim for perfection, but to have reliable tools and the right motivation to start. "PARKSIDE not only offers high-performance tools, but also promotes the courage to take the initiative," explains Andrea Francesco Varisco, Director of Promotional Purchasing and Marketing at Lidl Italia. The new campaign with Schwarzenegger and Moeller shows that in DIY there are no insurmountable obstacles when we believe in ourselves and rely on the right tools." The omnichannel campaign will start on 1 September 2025 with widespread distribution on various channels: out-of-home, digital, social media and TV commercials. An approach that confirms Lidl's commitment to making DIY accessible to everyone and strengthening PARKSIDE's image as a consumer-friendly brand. Read more: LIDL lancia la nuova campagna PARKSIDE con Arnold Schwarzenegger e Ralf Moeller - Food Affairs #smartdiscount #lidl #parkside #privatelabel #ownbrand #hd #harddiscount #nonfood #diy #branding #germany #europe #italy #tv #commercial #ralfmoeller #arnoldschwarzenegger #promotion #marketing #drc #discount #retail #consulting #discountretail #discountretailconsulting #retailconsulting #google

Discount Retail Chain Aldi Belgium is the first Aldi Nord country in which it is introducing electronic shelf labels in all stores. Outlets in East and West Flanders are currently being converted. By the end of the year, all 445 Aldi Nord stores in Belgium are to be equipped with digital labels. Unlike Aldi Süd, which surprisingly equipped all of its about 6,520 stores in all of its countries with labels from a single manufacturer, the Chinese supplier Hanshow. Aldi Nord will rely on more than one technology provider. Competitor Lidl also works with more than one supplier, having introduced digital labels from market leader VusionGroup and SoluM. In Belgium, Aldi Nord relies exclusively on SoluM, the supplier that once entered the market as a spin-off from Samsung. Aldi Nord is currently still negotiating with other technology suppliers. Ultimately, at least two providers will be allowed to supply the Essen-based discounter, with only one technology supplier being selected per country, according to employees of the discounter who spoke to The Retail Optimiser without wanting to be named. Yellow colour for bonus points Aldi Nord uses four-colour labels in Belgium to display information in red, white, black and yellow: red for special offers or price reductions, white for regular prices in the fixed range and yellow for products for which customers can collect bonus points in Aldi Nord’s new loyalty programme in Belgium. In a press release, Aldi Nord quotes its Belgian sales manager Céline Rotthier as saying: “The advantage for our customers is that we can respond even more quickly to price reductions and special offers.” It is not entirely clear whether this really means more dynamic pricing in competition with Lidl or simply new efficiency in price communication on the shelves. Read more: Aldi Nord installs digital labels from SoluM in Belgium - Retail Optimiser #smartdiscount #esl #belgium #label #shelf #pricing #digital #harddiscount #hd #pricetag #automated #it #drc #discount #retail #consulting #discountretail #discountretailconsultign #retailconsulting #google #solum #hanshow #vusiongroup

All groceries have become more expensive in the past three and a half years. The shelf prices of A-brand products rose slightly more than those of private labels. As a result, the price gap between A-brands and private labels in Dutch supermarkets has grown to almost 40%. Supermarkets see this larger price gap as an opportunity to put a new price point on the market, above the regular private label but below the A-brand. A great opportunity for private label producers and B-brand suppliers. Private labels have been on the rise in Dutch supermarkets over the past two decades. Over the past three and a half years, this advance has accelerated substantially. According to market researcher NIQ, private labels have taken no less than 2.3 percentage points of market share from brand manufacturers since the beginning of 2022. This is of course a consequence of the unprecedented high food price inflation in this period. Since the beginning of 2022, groceries have become about 33% more expensive on average. Consumers have responded to these high prices by, among other things, opting for cheaper variants of the products they used to buy, such as private labels. In addition, service supermarkets have also paid more attention to their private labels with different shelf layouts and offers to keep the price-sensitive consumer on board. Prices of branded products rose faster than private label prices What has undoubtedly also played a role in the recent market share gain of private labels is the larger price difference between brands and private labels. All groceries have become more expensive, but the price increases of branded products were generally slightly higher than the price increase of private labels. In Dutch service supermarkets, branded products have become on average 31% more expensive since January 1, 2022. In the same period, the shelf price of private labels has risen by an average of 'only' 20%. This difference in price dynamics is not only due to the bargaining power of brand manufacturers. In some cases, brand manufacturers have increased shelf prices in order to be able to offer more discounts afterwards. In addition, food retailers determine the final consumer price on the shelf and in many cases it is the supermarket that has raised the prices more than was necessary on the basis of the purchase price increase. They did this to repair their own profit margins, subsidize other product categories and to make their private label assortment more attractive to consumers. Brands now on average almost 40% more expensive than private labels The price difference between brands and private labels can differ per product category. In some categories such as canned fish or olive oil, the average price difference is limited to less than 20%, while private labels in beer or energy drinks, for example, are on average 70% cheaper. The amount of the difference depends on many factors, such as the strength of the brand and the competitive relationships between suppliers. If we lump together the most relevant product categories, the categories where brand and private label are both available, private labels in the Netherlands were on average roughly 34% cheaper than their branded alternatives at the beginning of 2022. Because the prices of branded products have risen faster in recent years, the price gap has now grown to an average of more than 39% (see Figure 1). Figure 1: Price gap between brands and private labels has grown to almost 40% in 31/2 years However, percentages do not mean much to consumers. They look at absolute numbers. Because branded products are often more expensive, the price increase in euro cents hits brands harder than for private labels anyway. Due to these absolute price increases, branded products may also shoot through psychological price barriers, causing consumers to drop out more quickly. A-brands are left with a bigger price gap in their stomachs Very cautiously, Dutch consumers are starting to regain some confidence and we are seeing a cautious recovery in volume demand for food. Grist to the mill of the A-brands, you would say, because they may be able to win over the customers they have lost in recent years, the aforementioned 2.3% market share shift to private labels. The larger price gap does bother them. And because manufacturers have no direct control over the consumer price, it will be very difficult to lower the prices of their A-brands again. With a more active promotion policy, more bulk packaging, shrinkflation to maintain psychologically important price points and/or innovation, A-brands try to positively influence consumer perception. But in the end, they are mainly at the mercy of the food retailers. They have the final say on the price on the shelf. Supermarkets see opportunities to fill price gap However, those Dutch food retailers have their own concerns. Service supermarkets in particular have seen their profit margins come under pressure in recent years due to higher purchasing costs, and perhaps even more so due to higher personnel costs (including an increase in the minimum wage), rents and energy and transport costs. To repair these profit margins, they are currently cutting costs, for example, and putting more pressure on price negotiations with suppliers, for example by working more internationally in purchasing. But the wider price gap between brands and private labels gives them an additional opportunity to boost profit margins. With the introduction of products at a new price point, below the A-brand but above the regular private label, food retailers want to take advantage of the booming consumer sentiment. The new price point should entice consumers to spend more in-store (greater operating leverage) and is expected to generate higher gross margins than retailers earn on brands and/or their regular private label range. Easier said than done Whether the rollout of such a new price point will be successful is literally the million-dollar question. Opinions in the market are divided on this. However, there are a number of common denominators that help determine the chance of success: The price difference must be large enough to entice consumers to opt for this new price point; The potential volume must be large enough.The potential benefits must outweigh the costs of a new product introduction. This consideration can differ per supermarket chain; There must be room to make a distinction. A variation in raw materials, production processes and/or product functionalities must be able to provide added value for the consumer; It is possible that a brand player can no longer maintain a good price point due to the price increases and there is the possibility to claim this price point with a new product launch. Based purely on the above factors, the number of product categories in which the price gap can be filled with a new price point is relatively limited. But the need to improve margins and continue to put pressure on price negotiations with brand suppliers is so great that it cannot be ruled out that food retailers will opportunistically view the larger price gap. Good news for private label manufacturers and B-brand suppliers The most logical candidates to supply these products at the new price point seem to be the private label manufacturers. The relationships are often already there and for these manufacturers, such a range with more premium products generally offers higher margins and the opportunity to work with the food-retail customer in a more strategic way. In many product categories, the volume potential is not large enough to justify the investment in a completely new product. If a food retailer still wants to choose to claim the new price point in such a category, temporarily or otherwise, then B-brand manufacturers can offer an alternative. By opting for existing products, food retailers may be cheaper. For B-brand manufacturers or perhaps even foreign A-brand players, the price gap offers the opportunity to increase market share or gain access to a different geographic market. Read more: Wie gaat het grotere prijsgat tussen A-merken en huismerken vullen? - Rabobank #smartdiscount #rabobank #netherlands #niq #research #privatelabel #abrands #expensive #inflation #price #bbrand #fmcg #opportunity #harddiscount #hd #abrand #brand #ownbrand #whitebrand #drc #discount #retail #consulting #discountretail #discountretail #discountretailconsulting #retailconsulting #google

Discount Textile Retail Chain Zeeman once again surprises the market with the introduction of a lab-grown diamond in a silver pendant. Another strategic stunt that reinforces the essence of the brand: simplicity without frills, according to consumer psychologist Patrick Wessels. Zeeman has struck again After the wedding dress, the perfume Air and streetwear SKEER, the textile chain now presents a 'lab-grown' diamond in a silver pendant for less than thirty euros. A marketing stunt? Absolutely. But one that reinforces the essence of the brand and holds up a mirror to the entire luxury category. The media attention is massive, from MarketingTribune to AD and of course on LinkedIn and other social platforms. So, what can other brands learn from that? The diamond as a price-psychological crowbar Diamonds have traditionally functioned as a costly signal. They are expensive, scarce and symbolize status and eternal love. The price is the product. Zeeman breaks with this by offering a diamond for the price of a T-shirt. A great way to attract attention. It turns the well-known price-quality heuristic upside down: consumers are used to 'expensive = good'. So it excites when a brand breaks through this convincingly. 'Zeeman does not sell diamonds. She sells a statement', says Patrick Wessels Consumer Psychologist. Lab-grown diamonds, as Zeeman offers them, are chemically and physically identical to natural diamonds, according to GIA, the main grading institute. The difference is in the origin, not in the properties. The cost price is therefore considerably lower. Something that Zeeman uses to sideline the entire category. From status to smartness A diamond traditionally shows how much someone can spend. Zeeman reverses that logic. Whoever buys this diamond proves that he is not paying for 'unnecessary frills'. The symbol of status changes into one of cleverness. This framing fits in with the broader movement, in which consumers value transparency and sustainability. Those who are not fooled by marketing fuss score social capital. Especially now that price consciousness and social awareness are increasingly coming together. And, that is right up Zeeman's alley within its own segment. Persuading with Education On the campaign page, Zeeman explains the lab-grown diamond production process (using Chemical Vapor Deposition). The brand also explains how certifications drive up the price and how margins are built within the traditional supply chain. Transparency is therefore not an afterthought, but the core of the creation. Psychologically, this has a dual effect: it removes the fear that cheap equals fake. And it positions Zeeman as a brand that honestly explains how the market works. Exactly the same strategy that previously proved successful with the perfume "Air" and the wedding dress. Campaigns that yielded both Effie awards and significant PR impact. Zeeman's Timing is Strategic The timing is no coincidence. The prices of lab-grown diamonds have fallen sharply in recent years. In 2024, diamond company De Beers lowered the recommended retail price of its subsidiary Lightbox to approximately $500 per carat. A price drop of 25 to 40 percent. This revealed the wide gap between production costs and sales price. 'The product itself isn't revolutionary, but Zeeman's framing is', said Patrick Wessels, Consumer Psychologist. The traditional diamond sector is also struggling with declining demand and fierce competition. It is precisely this tension that makes Zeeman's campaign newsworthy. The product itself isn't revolutionary, lab-grown diamonds have been around for a while—but Zeeman's framing is. No frills, but with risks Of course, there are risks. Zeeman deliberately doesn't provide certificates, because, according to the brand, they mainly add costs. This differs from what consumers are accustomed to from jewelers. Therefore, the trust rests entirely with the brand itself. For Zeeman, this fits the proposition, but for the category, it could represent a symbolic shift. A second risk is that the diamond's significance as a symbol of exclusivity will further erode. For Zeeman, this is a byproduct; for traditional players, it's a threat. Seven marketing lessons for entrepreneurs Find friction in the market Where price and perception consistently diverge, there's room for exposé. Make price a creative concept The €29.99 is the campaign, not just a footnote. Use explanation as evidence Explain how a product is made and priced. Transparency builds trust. Make a moment of it Zeeman launched with a PR event at Utrecht Central Station. That creates news value. Build on brand DNA 'No frills' is not an empty slogan but a consistent strategy. Play along with market dynamics When prices fall or business models are under pressure, this offers opportunities. Measure beyond revenue It's about brand associations, earned media and traffic to the core collection. Masterclass in brand building The biggest lesson is in the brand strategy. Zeeman does not launch diamonds to structurally enter the jewellery market. The diamond is only meant to reload the brand essence. Just like before with perfume, wedding dress and sunglasses. In doing so, Zeeman proves how strong brands can confirm their identity by temporarily stepping into another domain. Not to gain market share, but to increase mental availability. The 29.99 euro diamond is not a product innovation, but a psychological masterclass in brand building. Read more: Zeeman verkoopt diamant van 29,99 euro: ‘Strategische stunt is masterclass merkbouw’ #smartdiscount #zeeman #netherlands #diamand #assortment #promo #surprise #harddiscount #hd #textile #drc #discount #retail #consulting #discountretail #discountretailconsulting #retailconsulting #google

Discount Textil Retail Chain Zeeman recorded a net turnover of 774.2 million euros last year: a growth of 14.1 percent. Sales volumes rose slightly less rapidly, by 4.6 percent to 290.7 million products. In 2021, the discounter recorded a turnover of 678.5 million euros, compared to 616.6 million euros a year earlier. This is stated in the CSR report of the textile discounter for 2022. Nothing is reported about the profit. The discounter opened fewer stores last year than the year before. In 2022, ten stores were added (until 1313); In 2021, there were 24. The workforce was also expanded by 96 extra FTEs. On the financial front, the retailer expects to face "challenging macroeconomic and global developments" in the coming financial year. In the report, Zeeman focuses in particular on the sustainable steps that have been taken. For example, more than 33,000 second-hand garments have been sold and the company has launched four new 'living wage' programs, which allow employees in Asia and Turkey to receive a fairer salary. Source: Retail Trends #smartdiscount #zeeman #sales #salesgrowth #growth #netherlands #drc #discount #retail #consulting #discountretail #discountretailconsulting #retailconsulting #google