Despite the multitude of stores in most European markets, discounters plan to open up to ten million square metres of store surface in five years’ time. Even in so-called saturated markets they still see a lot of chances for growth, LZ Retailytics says.
Three major players
By 2021, discounters will already be a bigger channel than hypermarkets, LZ Retailytics concludes in a new report. In the next five years, they want to open ten million square metres of new stores, equivalent to the complete current store surface of Carrefour in Europe. In the same time span, hypermarkets would gain only 1.8 million square metres, supermarkets 4.1 million – ensuring they remain the largest retail channel in Europe.
The expansion of the three major discounters (Lidl, Aldi Nord and Aldi Süd) will not slow down, the analysts predict: their estimated growth is around 6 % each year until 2023. Discounters will keep opening new stores and expanding current stores, while expanding their product range: in “supermarketising” their concepts, they will continue to expand their sales chances. Lidl plans to add 20 metres of shelf space to its German stores, while Aldi Nord’s new store concept also is deemed to be very promising.
Germany, the UK and Russia
Remarkably, 60 % of the growth the discounters will achieve, will be made in Western Europe. Even more surprising: Germany will be the key growth areas as despite the market’s supposed saturation, discounters will be able to keep on opening new stores – especially in city centres. Moreover, discounters can also grow through acquisitions: Netto (Edeka‘s discount chain) has recently acquired stores from Kaiser’s and Treff 3000. In Britain, Lidl and Aldi (Süd) are involved in a bitter battle for the number one spot in the discount market, leading them to try to grow faster than the other one.
However, neither Aldi nor Lidl are present in the most important growth market for discounters: Russia. Local market leader Pyaterochka is an agressive chain that aims to add 18 billion euro to its turnover, enjoying the fact that political and economical factors make it unlikely for Western discounters to gain a presence in the Russian market. In the Ukraine and Norway as well, both discounters are not present and the market is strongly in the hands of local chains.
In the rest of Europe, Lidl is the dominant force. The relative growth of the chain (4.3 % per year) is smaller than that of Aldi Nord (5.4 %) and Pyaterochka (6.8 %), but in absolute size the chain accounts for 2.5 million square metres of store surface in Europe. LZ Retailytics’ analysts call the chain “unstoppable”, unless if both Aldi’s – currently two separate companies – start working together more closely and borrowing intelligently from Lidl’s successful formula.
