Discounters in Austria

2020 IMPACT

One-stop shopping destination benefits discounters during pandemic

Whilst continuing to expand its outlet network in Austria, discounters recorded impressive double-digit current value growth in 2020 as a direct result of the pandemic and subsequent lockdown. This was not only due to some initial stockpiling on various groceries when the lockdown was announced, but also because consumers wanted to visit as few establishments as possible, and therefore preferred one-stop shopping opportunities which particularly benefited discounters and hypermarkets, along with supermarkets at the cost of other channels such as convenience stores, forecourt retailers, and traditional grocery retailers such as bakers and butchers.

Home seclusion trend results in greater demand for high-quality but affordable ingredients as consumers cook from scratch

Although many consumers experienced a significant dip in their disposable incomes due to the lockdown and rising unemployment which forced them to prioritise their expenditure, they were less likely to save money on groceries, particularly as they were unable to visit foodservice outlets from mid-March to mid-May. With remote working measures in place resulting in the home seclusion trend, Austrians spent more time preparing and cooking meals from scratch, while indulging themselves with high-quality groceries in the face of the uncertain times and cutbacks in other areas.

Highly consolidated competitive landscape dominated by Hofer

The competitive landscape of discounters remained highly consolidated amongst three players in value share terms; the dominant Hofer KG, followed by Lidl Österreich GmbH and Rewe International AG (Penny Markt), with all three continuing to add to their outlet networks in 2020. Due to its highly trusted private label lines, aggressive price campaigns and popular non-grocery ranges, Hofer enjoys an extremely high level of consumer loyalty as it is considered that approximately 90% of all Austrian consumers shop at one of its stores, at least occasionally.

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