German supermarket chain Rewe has turned its attention to the Grand Duchy of Luxembourg. It recently opened a store in Echternach and will soon open several others, which spells bad news for companies like Ahold Delhaize.
Interesting and peculiar market
Hundertmark’s store in Echternach had a very positive launch back in April: on average, customers spent twice as much as they did in similar stores in Germany. That is not a coincidence, as retailers have long been drawn to Luxembourg because of the high consumer spending patterns there. To make sure the customer felt at home in the new store, about a quarter of the product range also hails from the country.
Rewe’s arrival in Luxembourg is even more competition in a saturated market. Local chain Cactus has been the dominant force for quite some time, but Louis Delhaize, Auchan, Ahold Delhaize, Aldi, Lidl, Colruyt and Carrefour are all present in Luxembourg. Particularly Auchan and Ahold Delhaize have expanded a lot in the Grand Duchy over the past few years.
Not only do consumer spend more in Luxembourg, it is also a very peculiar market because of its population. Almost 50 % has a foreign passport and it has a lot of foreign workers, giving retailers the opportunity to compete more easily with discounters because they can present a more expansive product range than in other countries.