Despite seeing a slight decline in current value sales in 2021 compared with the previous year, this was still a reasonable year for discounters, with sales remaining well above the 2019 pre-pandemic level. This trend was in line with the performance of all major grocery retail channels, as pandemic-driven restrictions were eased in 2021, which made dining in restaurants more accessible.
For years, discounters in Germany underwent company-wide modernisation efforts to compete more directly with the supermarket model, offering a similar in-store shopping experience as supermarkets, while maintaining price points on everyday products that were on average lower. This helped major retail chains and the channel overall gain share of overall grocery retailing in Germany, mostly at the expense of key supermarket retailers.
Discounters also loses out to some extent compared with other grocery channels in terms of online sales. Given the traditional no-frills format of the channel, online and omnichannel offerings were not emphasised pre-pandemic compared with other more modern channels, such as supermarkets and hypermarkets.
Since the start of the pandemic in early 2020, discounters have started to rethink their previous strategy of competing head-on with supermarkets with a supermarket-like model. Instead, discounters have opted to lean on the original no-frills model as a unique selling point that differentiates the channel.
Although a giant in the German grocery retail market, Lidl has traditionally maintained a smaller share of the discounters channel in Germany when compared with the Aldi brand, which is a combination of Aldi Nord and Aldi Süd. Both brands grew rapidly during the pandemic through expansion efforts, adding more stores in the wake of strong sales years.
A variety of post-pandemic economic indicators is likely to drive renewed interest in the discounters channel in the years ahead. Discounters is always a go-to retail channel for German consumers in times of increased price sensitivity, and it is likely that consumers will be more cautious in their spending as the economy recovers from the challenges of the pandemic.
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Discounters are chained retail outlets typically with a selling space of between 400 and 2,500 square metres. Stores have a primary focus on selling a limited range of foods, beverages, tobacco and non-groceries at budget prices, regularly via private label. Discounters can be classified as hard discounters and soft discounters. Hard discounters, first introduced by Aldi in Germany, are also known as limited-line discounters. Stores are typically 400-900 square metres and stock fewer than 1,000 product lines, largely in packaged groceries. Product range available is predominantly made up of private-label brands. Soft discounters are usually slightly larger than hard discounters, and are also known as extended-range discounters. Stores typically stock 1,000-4,000 product lines. As well as private-label and budget brands, stores commonly carry leading brands at discounted prices. Example brands include Aldi, Lidl, and Dia.See All of Our Definitions
This report originates from Passport, our Discounters research and analysis database.
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