Discounters in Austria

PROSPECTS

Discounters topping the bill for grocery retailer growth

Continually increasing consumer frequency and a healthy level of expansion is expected to help discounters remain one of the top-performing channels in grocery retailers in Austria over the forecast period. With the review period impacted by the closure of the Zielpunkt discounter chain, the channel is predicted to record stable growth over the forecast period above that of hypermarkets, also eclipsing other channels such as supermarkets, forecourt retailers and especially convenience stores.

Discounters heads towards the mainstream, with consumer preconceptions less of an issue

Hofer and Lidl will likely be responsible for the largest part of the growth rate projected in discounters over the forecast period. This is because these former “hard discounters” are anticipated to become even softer, offering an increasing range of branded products along with their popular private label lines, while increasing the role of price campaigns in their strategies.

Lidl likely to lead new store openings, but overall pace set to slow

Towards the end of the review period, Lidl Austria GmbH invested EUR100 million in new store openings and the modernisation of existing ones. In 2018, the company opened the first stores following its new “metropolis store” concept (“Metropolfiliale”) and has announced its intention to expand the idea to other major Austrian cities such as such as Graz, Linz, Salzburg, Innsbruck and Bregenz.

COMPETITIVE LANDSCAPE

Hofer’s dominance looks unshakeable

Having celebrated its 50th anniversary in 2018, Hofer KG continued to lead discounters in Austria in 2019. Due to its highly trusted private label lines, aggressive price campaigns and popular non-grocery ranges, the company enjoys an extremely high level of consumer loyalty as it is considered that approximately 90% of all Austrian consumers shop at its Hofer brand, at least occasionally.

Trending fmcg are likely to be seen in discounters

Discounters continue to ensure customer loyalty mainly with their extensive ranges of competitively priced private label, which are renowned for their good quality, and by always reacting quickly to consumer trends such as, most recently in 2019, gluten-free foodstuffs, body care products containing no hormonally active substances (both offered by Hofer), and vegan burgers (from Lidl). Moreover, they are receiving additional customer frequency thanks to their weekly changing ranges in non-grocery categories such as homewares, appliances, electronics, apparel, home improvement and sporting goods, especially in the case of Hofer and Lidl, again keeping on top of customer needs and the latest trends.

Norma and Penny Markt predicted to record low outlet growth

While outlet expansion from Hofer and Lidl is set to decelerate in Austria, it will be even more the case for competitors Norma GmbH & Co KG and Rewe International AG’s Penny Markt, which are expected to remain more passive over the forecast period. Norma has only a regional presence in Austria limited to the northwestern part of the country, which can be supplied from its logistics facilities in Germany.

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