Consolidation is the name of the game
The Schwarz Gruppen, which owns Lidl and Kaufland, exceeded 106 billion euro in turnover in 2017, and is by far the biggest player on the European market for grocery retailers.
Revenues in the German Schwarz Group rose to new heights in 2017, up 6%, to 106,375 billion euro in Europe alone according to www.retailytics.com. 75% of the turnover comes from Lidl, which counts 10,460 stores in Europe and the United States. The rest from Kaufland.
Investments in stores and products
The giant retailer plans to make investments in 2018 at the same level as in 2017, when the Schwarz Group invested a total of 7 billion in new stores and facilities. Lidl plans to open more than 300 stores this year. At the same time the the lowprice giant will increase the product range from 1,800 to 2,500 products, says CEO Klaus Gehrig to Frankfurter Allgemeine Zeitung. The pressure to increase is not least due to the fact that Aldi has increased their product range.
German discounter takes the lead in Europe
While traditional supermarket owners lose sales and market shares in Europe, the three largest discounters increase their position, writes the international analysis firm LZ Retailytics in an analysis of the European grocery market.
Overall, the top 50 players now account for 70.2 %. of total grocery sales in Europe. This is an increase of 0.7 %. since 2014. However, the total market share of Lidl in Europe is less than 7 %.
X5 Retail Group
Aldi has managed to increase its turnover by 6.4 % to 61.7 billion euro and takes a third place in the European market with a market share of 3.9 %. Second, with a market share of 4.1 % is French Carrefour, which decreased their turnover in Europe with 0.7 %.
Also, British Tesco has lost its turnover in the past year. The decline is 3.9%, giving a turnover of 56.8 billion euro and a market share of 3.6 % in Europe.
According to LZ Retailytics, there is a clear trend from Mercadona in Spain to Esselunga in Italy that retailers who do not “understand” that the price is an important parameter for customers - loses market shares.
X5 adds 1,2 million sqm in 2017
In Russia there is a big battle between market leader X5 Retail Group and Magnit, both of which performed double-digit sales growth in 2017. However, X5 increased the gap to the competitor with the opening of 1.2 million. sqm. stores in 2017 - it corresponds to what the ten largest in Germany have done collectively!
X5 Retail Group
The European landscape is consolidating fast year after year and there seems to be no cure against price-aggressive discounters, that by combing both larger product ranges and lower prices increases their shares of the market. Looking East, Russian heavyweight X5 Retail Group expands with great speed in its vast home market.
Smaller retailers are failing to keep up with the big fishes, but suppliers should not forget to keep an eye on smaller retailers achieving double digit growth in both developing and mature markets. And of course, everybody has an eye on Amazon which will reach a 12th place on the European ranking in front of Ahold Delhaize, Walmart and Mercadona in 2018.