"Lidl group will be Europe's largest retailer by 2018" | RetailDetail

"Lidl group will be Europe's largest retailer by 2018"

"Lidl group will be Europe's largest retailer by 2018"

Even though the European economic situation seems to improve, discounters will keep growing and according to a recent report, the Schwarz Group (Lidl's parent company) will become the largest group in Western European food retail by 2018.

Power shift next year?

According to the German discounter's most recent numbers, published in April, Schwarz has a 74 billion euro turnover last year through Lidl and Kaufland, with its aggressive price tactics and its compact hypermarkets. That is a big increase (+ 13 %) compared to the year before, when it managed 65 billion euro.

 

If Schwarz can keep up this pace, it will surpass large retailers like Tesco and Carrefour in Europe, according to David Gray, PlanetRetail's retail analyst. "By 2018, according to our forecasts, Schwarz Group will overtake Carrefour as Western Europe's largest grocery player, generating sales of more than 80 billion euro. This is an unprecedented power shift in European retail, fueled by the near-unstoppable growth of the format across Western European markets."

 

The majority of the group's total turnover comes from Western Europe. "We estimate Schwarz's current Western European turnover to be 64.6 billion euro, including numbers from Lidl and Kaufland. If both formulas keep up their current growth pace, 80 billion euro could be reached before 2018, even within a year or a year and a half."

 

Discounters become service supermarkets

Gray believes there are several reasons for the success, things that discounters like Aldi (mostly Aldi Süd) and Lidl have done before: open stores in city centers (mostly in the United Kingdom) and more focus on fresh foods and brands in their product range. That transforms them into service supermarkets without sufficient distinguishable capabilities to get loyal customers.

 

"The discounter branch will grow 4 % each year until 2018, while Schwarz will surpass the average growth rate with 5 % per year. Hypermarkets and superstores, as a way of comparison, will only grow 2 % per year", Gray said. That is why established Western European retailers, like Carrefour and Tesco, should not rely on their habitual formats, if they wish to counter the rapid discounter growth.

 

New formulas will have to be used to buckle the trend: convenience retail is a flourishing branch and one of the fastest-growing retail channels, in France but mostly in the United Kingdom. Half of the 10 largest Western European convenience retailers are British, while plenty of additional convenience formulas will be launched in Western Europe over the coming months, mainly through large retailers like Tesco or Carrefour."

Questions or comments? Please feel free to contact the editors


Komono wants to reach 10 physical stores this year

17/05/2018

Belgian accessory label Komono wants to double its number of physical stores to ten this year. “The stores are important to tell our story”, Anton Janssens and Raf Maes told De Standaard.

Hema has to pay Levi's millions

17/05/2018

Store chain Hema needs to pay a 4.4 million euro fine to jeans brand Levi’s after the latter went to court because Hema applied its V-shaped stitching to its own collection.

Suitsupply suffers losses because of expansion

15/05/2018

Dutch Suitsupply has experienced a decent turnover growth last year, but its net result tumbled below zero because of its huge investments. Nevertheless, that is the only way forward according to its founder, whose focus is still fixed on the United States.

Starting this Friday, Belgium has its own national e-commerce event

15/05/2018

Move over, Black Friday! This week, Belgium launches its own national e-commerce event as Jack & Jones, Kiabi, La Redoute, Sarenza, Tape à l'Oeil and Veritas organise the first Belgian Friday.

H&M is turning to algorithms to boost sales again

14/05/2018

In an effort to reverse the decline in its worldwide sales, H&M is using technology that will help the world’s largest clothing brand stock its stores more efficiently, sell more effectively and adapt more quickly to current consumer trends.

Zalando's profit wiped away in first quarter

08/05/2018

German online retailer Zalando saw its first quarter profit completely wiped away: last year's 5.1 million euro net profit turned into a 15 million euro loss. Turnover grew 22 %, investments being the cause for both.