Retailing in Denmark
Euromonitor International's Retailing in Denmark report offers insight into key trends and developments affecting the industry. The report examines all retail channels to provide sector insight. Channels include department stores, food retailers, health and beauty retailers, clothing and footwear retailers, home furniture and household goods retailers, durable goods retailers, and leisure and personal goods retailers. There are profiles of leading retailers, with analysis of their performance and the challenges they face. There is also analysis of alternative selling channels (kiosks, homeshopping, internet retailing, service stations, vending and direct selling, as available).
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Chapters: 12 | Tables: 88 | Publication date: Jul 2006
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Executive summary
Grocery retailers push into non-food categories
In 2005, grocery retailers continued to develop their non-food product ranges as increased price competition in food retailing forced them to seek other avenues of revenue. During the review period, grocery chains targeted clothing, health and beauty, durable goods and household care products. Grocery retailers particularly increased their focus on the low end of durable goods. Commodities products such as 14-inch televisions are broadly understood by consumers, relatively homogenised and require little specialist input. Consequently, they are suitable for sale via grocery retailers. Low entry prices also gave supermarkets access to new technology categories such as DVD players.
Growth for discounters
Discounters continued to enjoy value growth in 2005 as Danish consumers increasingly expressed satisfaction with the quality of products sold through this channel. This was despite pricing pressure from other outlets and the threat of new market entrants. The German hard discounter Lidl entered the Danish market before the end of 2005. This initiated a flurry of activity amongst market incumbents. Aldi Holding ApS, Fakta, Rema 1000 Danmark A/S and Netto announced ambitious store network expansion plans in 2005 as the scramble for margin protection began.
Change in the legislative climate
There was a clear shift in central government policies regarding the protection of smaller retailers, during the review period. Previously, smaller retailers were permitted special operating allowances to compete with their larger competitors. These included longer hours and Sunday opening. However, since the current central government’s election in the early 2000s, significant moves have been taken to liberalise the retailing environment. Restrictions regarding opening hours and Sunday openings were significantly relaxed and trade sources are of the opinion that selling area restrictions could be abolished by the end of the forecast period. This all bodes well for the expansion of store-based retailing in Denmark.
Continued concentration of the retail store network
The traditional retail structure of numerous small and, to a certain extent, specialised retailers has given way to a more concentrated retail landscape with fewer and larger retail outlets. In comparison to other Northern European countries, Denmark still has a relatively high ratio of retail outlets per inhabitant but the growth in importance of branding, distribution and purchasing economies is placing a heavy strain on the survival of independent retailers. This led to the closure of a considerable number of independent retailers throughout the review period as the strength and importance of affiliation to retail chains dominated market structural changes.
Concession partnerships earmarked for growth potential
Whilst concession partnerships remain relatively new to Denmark, the recent partnership agreement between Q8 and 7-Eleven Danmark A/S suggests a bright future for the concession partnership strategy. Trade sources believe that the alliance of Q8 and 7-Eleven is a sign of things to come and should be viewed in the context of recent legislative changes to opening hour restrictions. The general belief is that the most cost efficient method to capitalise on these legislation changes is through concession partnerships. This is because a concession partnership with a strong brand can generate and attract new customers cost efficiently but it also allows both sides of the alliance to continue to focus on their respective core business.
Table of contents
1. EXECUTIVE SUMMARY
Grocery retailers push into non-food categories
Growth for discounters
Change in the legislative climate
Continued concentration of the retail store network
Concession partnerships earmarked for growth potential
2. OPERATING ENVIRONMENT
2.1 GOVERNMENT POLICIES
2.2 LEGISLATION
Lobby groups
2.3 OPENING HOURS
2.4 RETAILING LANDSCAPE
Main street versus out of town
Shopping centres and malls
2.5 EMPLOYMENT IN RETAILING
Continued growth in overall retailing employment
“The Danish Model”
Minimum wage
Table 1 Employment in Retailing: 2000-2005
3. RETAILING: RETAIL SALES
3.1 MARKET PERFORMANCE
Overview
Consumer spending expected to increase
Positive growth factors
Negative growth factors
Table 2 Sales in Retailing by Sector: Value 2000-2005
Table 3 Sales in Retailing by Sector: % Value Growth 2000-2005
Table 4 Sales of Grocery vs Non-Grocery in Retailing 2000-2005
4. RETAILING: COMPETITIVE ENVIRONMENT
4.1 LEADING RETAILERS
Overview of grocery retailing
Grocery retailing concentrated
Growth of discounters
The internationalisation of retailing
Increased competition in durable goods
Discounters damaging growth for toy retailers
Failed merger talks
Consolidation in booksellers
Cost-cutting in DIY and hardware stores
The development of chained retailing
Table 5 Retailing Company Shares: % Value 2004-2005
4.2 RECENT MERGERS AND ACQUISITIONS
High levels of consolidation in grocery retailing
Booksellers and mergers
Failed merger talks
Durable goods mergers
Summary 1 Major Mergers and Acquisitions 2001-2005
4.3 CONCESSIONS
Summary 2 Summary of Leading Retailers and their Concessions
5. PRIVATE LABEL
5.1 RETAILERS AND THEIR STRATEGIES
Strategies
Increased exposure for private label
Rising consumer preference for private label
Uncertain future for brands
Positioning
Private label positioning in Coop Danmark
Private label positioning in Dansk Supermarked
Penetration
Discounters a significant driver of private label penetration
Summary 3 Selected Retailers and their Private Label Products 2005
6. RETAILING: FORECAST MARKET PERFORMANCE
Overview
Positive growth factors
Negative growth factors
Table 6 Forecast Sales in Retailing by Sector: Value 2005-2010
Table 7 Forecast Sales in Retailing by Sector: % Value Growth 2005-2010
7. MARKET PERFORMANCE: GROCERY RETAILERS
7.1 OVERVIEW
Key trends and developments
Competitive environment
Internationalisation of grocery retailing
Forecast
Market entry of Lidl
The future of independent grocers
Table 8 Grocery Retailers by Sector: Value 2000-2005
Table 9 Grocery Retailers by Sector: Units 2000-2005
Table 10 Grocery Retailers by Sector: Selling Space 2000-2005
Table 11 Grocery Retailers by Sector: % Value Growth 2000-2005
Table 12 Grocery Retailers by Sector: % Unit Growth 2000-2005
Table 13 Grocery Retailers by Sector: % Selling space growth 2000-2005
Table 14 Grocery Retailers Company Shares: % Value 2004-2005
Table 15 Grocery Retailers Brand Shares: % Value 2004-2005
Table 16 Grocery Retailers Forecasts by Sector: Value 2005-2010
Table 17 Grocery Retailers Forecasts by Sector: Units 2005-2010
Table 18 Grocery Retailers Forecasts by Sector: Selling Space 2005-2010
Table 19 Grocery Retailers Forecasts by Sector: % Value Growth 2005-2010
Table 20 Grocery Retailers Forecasts by Sector: % Unit Growth 2005-2010
Table 21 Grocery Retailers Forecasts by Sector: % Selling space growth 2005-2010
7.2 FOCUS SECTOR: DISCOUNTERS
Key trends and developments
Consumer satisfaction with quality supporting growth
Competitive environment
Forecast
Table 22 Discounters: Value Sales, Outlets and Selling Space 2000-2005
Table 23 Discounters: Value Sales, Outlets and Selling Space: % Growth 2000-2005
Table 24 Discounters Company Shares by Value 2004-2005
Table 25 Discounters Brand Shares by Value 2004-2005
Table 26 Discounters Company Shares by Outlets 2004-2005
Table 27 Discounters Brand Shares by Outlets 2004-2005
Table 28 Discounters Company Shares by Selling Space 2004-2005
Table 29 Discounters Brand Shares by Selling Space 2004-2005
Table 30 Discounters Forecasts: Value Sales, Outlets and Selling Space 2005-2010
Table 31 Discounters Forecasts: Value Sales, Outlets and Selling Space: % Growth 2005-2010
7.3 FOCUS SECTOR: CONVENIENCE STORES
Key trends and developments
Competitive environment
Forecast
Table 32 Convenience Stores: Value Sales, Outlets and Selling Space 2000-2005
Table 33 Convenience Stores: Value Sales, Outlets and Selling Space: % Growth 2000-2005
Table 34 Convenience Stores Company Shares by Value 2004-2005
Table 35 Convenience Stores Brand Shares by Value 2004-2005
Table 36 Convenience Stores Company Shares by Outlets 2004-2005
Table 37 Convenience Stores Brand Shares by Outlets 2004-2005
Table 38 Convenience Stores Company Shares by Selling Space 2004-2005
Table 39 Convenience Stores Brand Shares by Selling Space 2004-2005
Table 40 Convenience Stores Forecasts: Value Sales, Outlets and Selling Space 2005-2010
Table 41 Convenience Stores Forecasts: Value Sales, Outlets and Selling Space: % Growth 2005-2010
8. MARKET PERFORMANCE: NON-GROCERY RETAILERS
8.1 OVERVIEW
Key trends and developments
Competitive environment
Forecast performance
Table 42 Non-Grocery Retailers: Value Sales, Outlets and Selling Space 2000-2005
Table 43 Non-Grocery Retailers: Value Sales, Outlets and Selling Space: % Growth 2000-2005
Table 44 Non-Grocery Retailers Company Shares by Value 2004-2005
Table 45 Non-Grocery Retailers Brand Shares by Value 2004-2005
Table 46 Non-Grocery Retailers Company Shares by Outlets 2004-2005
Table 47 Non-Grocery Retailers Brand Shares by Outlets 2004-2005
Table 48 Non-Grocery Retailers Company Shares by Selling Space 2004-2005
Table 49 Non-Grocery Retailers Brand Shares by Selling Space 2004-2005
Table 50 Non-Grocery Retailers Forecasts: Value Sales, Outlets and Selling Space 2005-2010
Table 51 Non-Grocery Retailers Forecasts: Value Sales, Outlets and Selling Space: % Growth 2005-2010
8.2 FOCUS SECTOR: HEALTH AND BEAUTY RETAILERS
Legislation
Vitamins & dietary supplements registration and classification
The distribution of OTC medicines
Key trends and developments
Forecast
Table 52 Health and Beauty Retailers: Value Sales, Outlets and Selling Space 2000-2005
Table 53 Health and Beauty Retailers: Value Sales, Outlets and Selling Space: % Growth 2000-2005
Table 54 Health and Beauty Retailers Company Shares by Value 2004-2005
Table 55 Health and Beauty Retailers Brand Shares by Value 2004-2005
Table 56 Health and Beauty Retailers Company Shares by Outlets 2004-2005
Table 57 Health and Beauty Retailers Brand Shares by Outlets 2004-2005
Table 58 Health and Beauty Retailers Company Shares by Selling Space 2004-2005
Table 59 Health and Beauty Retailers Brand Shares by Selling Space 2004-2005
Table 60 Health and Beauty Retailers Forecasts: Value Sales, Outlets and Selling Space 2005-2010
Table 61 Health and Beauty Retailers Forecasts: Value Sales, Outlets and Selling Space: % Growth 2005-2010
9. NON-STORE RETAILING: VENDING
Key trends and developments
Forecast
Table 62 Vending: Value 2000-2005
Table 63 Vending: % Value Growth 2000-2005
Table 64 Vending Company Shares by Value 2004-2005
Table 65 Vending Brand Shares by Value 2004-2005
Table 66 Vending Forecasts: Value 2005-2010
Table 67 Vending Forecasts: % Value Growth 2005-2010
10. NON-STORE RETAILING: HOMESHOPPING
Key trends and developments
Competitive environment
Forecast
Table 68 Homeshopping: Value 2000-2005
Table 69 Homeshopping: % Value Growth 2000-2005
Table 70 Homeshopping Company Shares by Value 2004-2005
Table 71 Homeshopping Brand Shares by Value 2004-2005
Table 72 Homeshopping Forecasts: Value 2005-2010
Table 73 Homeshopping Forecasts: % Value Growth 2005-2010
11. NON-STORE RETAILING: INTERNET RETAILING
Key trends and developments
Competitive environment
Forecast
Table 74 Internet Retailing: Value 2000-2005
Table 75 Internet Retailing: % Value Growth 2000-2005
Table 76 Internet Retailing Company Shares by Value 2004-2005
Table 77 Internet Retailing Brand Shares by Value 2004-2005
Table 78 Internet Retailing Forecasts: Value 2005-2010
Table 79 Internet Retailing Forecasts: % Value Growth 2005-2010
12. NON-STORE RETAILING: DIRECT SELLING
Key trends and developments
Competitive environment
Forecast
Table 80 Direct Selling: Value 2000-2005
Table 81 Direct Selling: % Value Growth 2000-2005
Table 82 Direct Selling Company Shares by Value 2004-2005
Table 83 Direct Selling Brand Shares by Value 2004-2005
Table 84 Direct Selling Forecasts: Value 2005-2010
Table 85 Direct Selling Forecasts: % Value Growth 2005-2010