7 Strategies: How To Combat The DiscountersRelease date: March 10th, 2015 (99 pages) PDF/Powerpoint format. Price: GBP999.00 |
Abstract
Over the last three months ResearchFarm has conducted an in depth analysis of the chances of success of various tactical and strategic responses to the discounters, including:
• relaunched private label propositions
• price wars
• discounter launch or acquisition
• co-location
• convenience retailing
• online retailing and
• raising buying synergies
The recommendations and conclusions are based on historical evidence and include case examples from Belgium, Denmark, France, Germany, the Netherlands, Poland, Spain and the UK.
Broadly speaking we found that three strategies have failed to reach their aim. Three other strategies were quite promising, whilst on a seventh the jury is still out.
The report shows clearly what works and what - so far - has not.
In this report our consultants reveal some of their trade secrets and cutting edge thinking, which they have not shared with the wider sector before.
Table of contents
Executive summary | p8 |
The context: EU Grocery Retailing in 2014 | p13 |
Grocery sizes: EU 27, 2009-2013 in ‘000 €bn, e | p14 |
Grocery sizes: shoppers cut back, shop around and go to hard discounters | p15 |
Grocery sizes: EU 27, 2008-2013 growth in % | p16 |
Grocery per capita sizes: EU 27 in 2013 in €, from Finland to Bulgaria | p17 |
Financials and KPIs: Aldi and Lidl in 2014 p 18 Aldi: figures 2010 - 14, international contributions more important than domestic | p19 |
Aldi Sued: 2013, sales per country in €m, market shares of total grocery universe in % | p20 |
Aldi Nord: 2013, sales per country in €m, market shares of total grocery universe in % | p21 |
Schwarz: sales 2008-13, growth, domestic share of total, LFL growth | p22 |
Lidl: 2013, sales per country in €m, market shares of total grocery universe in % 1/2 | p23 |
Lidl: 2013, sales per country in €m, market shares of total grocery universe in % 2/2 | p24 |
Spot the difference: a tale of two discounters | p25 |
The differences: format strategy, private label proposition, FMCG brands | p26 |
The differences: SKU counts, financial performance, expansion policy | p27 |
The differences: geographical spread, innovator and second mover | p28 |
The differences: online strategies | p29 |
Chapter 2: The private label relaunch | p30 |
7 strategies: private label proposition relaunch | p31 |
7 strategies: switch shoppers from brand to private label rather than losing them to Aldi | p32 |
7 strategies: Tesco’s Discounter range, real’s no name products, French attempts | p33 |
Recommendations: Is a private label relaunch effective? (1/2) | p35 |
Recommendations: Is a private label relaunch effective? (2/2) | p36 |
Chapter 3: launching a price war | p37 |
7 strategies: poor visibility into discounters, early missteps | p38 |
7 strategies: Hard discounters, 2013 UK stores data, 2020 forecast | p39 |
7 strategies: Hard discounters average SKU sales in UK in 2014, price wars | p40 |
7 strategies: Aldi and Lidl as biggest global buyers on SKU level | p41 |
7 strategies: Walmart’s failed German expansion as a warning | p42 |
Recommendations: Are price wars effective? (1/3) | p44 |
Recommendations: Are price wars effective? (2/3) | p45 |
Recommendations: Are price wars effective? (3/3) | p46 |
Chapter 4: launching or acquiring a discounter | p47 |
7 strategies: launching or acquiring a discount fascia, Edeka, Carrefour, Casino | p48 |
7 strategies: launching a discount fascia, Edeka as an exception to the rule? | p49 |
7 strategies: launching a discount fascia, Sainsbury’s and Netto | p50 |
7 strategies: launching a discount fascia, Tesco’s One Stop | p51 |
Recommendations: Is launching or acquiring a discount fascia effective? (1/2) | p53 |
Recommendations: Is launching or acquiring a discount fascia effective? (2/2) | p54 |
Chapter 5: The convenience opportunity | p55 |
7 strategies: securing convenience store sites, stopping discounter expansion | p56 |
7 strategies: the rise of click & collect, drivers of convenience success | p57 |
Format strategy: Aldi convenience, the Kilburn Store in London | p58 |
Format strategy: Aldi convenience, the EU opportunity | p59 |
Lidl: revamping the store format towards a convenience fascia, focus on fresh and food | p60 |
Lidl: low branded SKU count, the cash desk innovation | p61 |
Lidl: drawbacks of the new model, analysis, cost drivers, space considerations | p62 |
Lidl: new formats in Belgium, outlet store and inner city convenience | p63 |
Recommendations: Is exploiting the convenience opportunity effective? (1/2) | p65 |
Recommendations: Is exploiting the convenience opportunity effective? (2/2) | p66 |
Chapter 6: The online push | p67 |
7 strategies: the online push – opportunity as long as the discounters don’t engage | p68 |
7 strategies: the online push, Colruyt, Netto, Mercadona | p69 |
Dia: the first discounter to launch a click & collect service | p70 |
Dia: cheaper than in store, faster than drives and €30 average baskets | p71 |
Dia: catering to pedestrians, trial widened out, France only for now – now closed | p72 |
Lidl: online relaunch | p73 |
Lidl: online operations, huge branded non food presence online, international | p74 |
Lidl: tackling the non food issue, easier at Lidl than at Kaufland | p75 |
Lidl: online relaunch in Germany, coffee world, wine, pet foods, nappies etc | p76 |
Lidl: online turnover figures in Germany | p77 |
Lidl: online health & beauty launch, private label and FMCG A brands, multichannel | p78 |
Lidl: the future potential, h&b online | p79 |
December 2014: Lidl launches Deluxe online in Spain | p80 |
Recommendations: Is pushing an online proposition effective? (1/3) | p82 |
Recommendations: Is pushing an online proposition effective? (2/3) | p83 |
Recommendations: Is pushing an online proposition effective? (3/3) | p84 |
Chapter 7: collocation and footfall sharing | p85 |
7 strategies: co-location with a discounter – Aldi and dm, the footfall draw | p86 |
Aldi Sued & Rewe: teaming up in Germany, creating destination status | p87 |
Aldi Sued & Rewe: From competition to cooperation | p88 |
Recommendations: Is co-location with a discounter effective? | p90 |
Chapter 8: raising efficiencies in buying | p91 |
7 strategies: raising synergy effects in buying, Casino, ITM, Auchan, Systeme U, Carrefour, Cora | p92 |
7 strategies: private label excluded, will this affect Lidl or Aldi? | p93 |
7 strategies: France the anomaly, as discount channel loses share… | p94 |
7 strategies: …but not Aldi and Lidl (only Dia, Netto and Leaderprice) | p95 |
Recommendations: Is raising synergies in buying effective? | p97 |
Sources | p98 |
Charts and Tables Table 1: Grocery sizes: EU 28, 2009-2013 in ‘000 €bn, e | p14 |
Table 2: Grocery sizes: EU 28, 2011-2014 growth in % | p16 |
Table 3: Aldi: figures 2010 – 14 (€bn), international contributions more important than domestic | p19 |
Table 4: Aldi Sued: 2013, sales per country in €m, market shares of total grocery universe in % | p20 |
Table 5: Aldi Nord: 2013, sales per country in €m, market shares of total grocery universe in % | p21 |
Table 6: Schwarz: sales 2008-13, growth, domestic share of total, LFL growth | p22 |
Table 7: Lidl: 2013, sales per country in €m, market shares of total grocery universe in % 1/2 | p23 |
Table 8: Lidl: 2013, sales per country in €m, market shares of total grocery universe in % 2/2 | p24 |
Charts 1 & 2: Grocery sizes: EU 27 2008-13 growth in % | p17 |
Chart 3: Aldi Sued: 2013, sales per country in €m, market shares of total grocery universe in % | p20 |
Chart 4: Aldi Nord: 2013, sales per country in €m, market shares of total grocery universe in % | p21 |
Chart 5: Lidl: 2014, sales per country in €m, market shares of total grocery universe in % 1/2 | p23 |
Chart 6: Lidl: 2014, sales per country in €m, market shares of total grocery universe in % 2/2 | p24 |
Chart 7: Differences between Aldi and Lidl, key takeouts | p17 |
Chart 8: Hard discounters, 2013 UK stores data, 2020 forecast | p38 |
Chart 9: Hard discounters average SKU sales in UK in 2014 | p39 |