Discounters in Belgium

2020 IMPACT

Discounters benefits from stockpiling to a degree, but slowdown of Aldi expansion puts a dampener on the category

As a grocery retailing channel, discounters also benefited from stockpiling and on-trade to off-trade channel shifts during 2020. During the first half of the year, consumer demand for essential grocery products was particularly high, although this demand impacted different retail channels to varying degrees.

Lidl focusses on digitisation and home delivery options, in order to meet changing consumer needs

Pre-COVID-19, Lidl België GmbH & Co KG (the only other player of note) had been focussing on digitisation. The player has already launched its Lidl Plus loyalty app in Belgium, giving consumers access to exclusive promotions via digital coupons, digital receipts and store locator.

Aldi Group maintains its strong lead thanks to ongoing modernisation to keep it ahead of its competitors

Aldi Group maintains its strong lead in discounters in 2020, with Lidl België GmbH & Co KG being the only other notable player (Leader Price Belgique SA only holds a negligible share). Aldi Group maintains its place by remaining alert to increasing competition, not only from Lidl, but also from supermarkets and convenience stores, recognising the need to upgrade and differentiate its offering.

RECOVERY AND OPPORTUNITIES

Discounters continue to face competition from convenience stores and e-commerce

Discounters will continue to face competition from local convenience stores and e-commerce over the forecast period and, as such, growth is expected to be moderate over the next five years. As there are only two main players within the category, the majority of the competition comes from other retailing formats.

Lidl’s slowing down of expansion and innovation in 2020 is likely to prevent the player from winning shares

Lidl has been at the forefront of store innovation over the review period and the brand had recently launched a new store concept, a home delivery service, in 2019. Since 2020, however, the company has taken on a more conservative approach and decided to halt such intense renovation and innovation for a period of time.

Aldi’s next moves will dictate the direction of discounters overall

It remains somewhat unclear whether the closure of Aldi stores and slowing down of outlet expansion in 2020 has been temporary, or definitive. Aldi strategies (being the biggest player in the channel) have a significant impact on discounters overall, so what Aldi does next is crucial for the category.