Discounters in Hungary

PROSPECTS

Some outlets get a bit closer to the concept of supermarkets

Some discounters, especially those located near world heritage sites in central Budapest, tend to have the feel of shopping in a supermarket. Such outlets have set up a delicatessen service and counters serving fresh meat, meat and dairy products.

Expanding operations is a tough challenge, as retail development is highly regulated

Discounters cover all geographic regions and have considerable potential for opening new outlets, although for some there are still white spots. In particular, Aldi Magyarország Élelmiszeripari Kereskedelmi, the last operator to enter the channel in the late 2000s, is eager to find new locations.

Premiumisation of product assortment

Discounters were once known solely for good deals on essential groceries; however, they have since worked hard to improve their image and to attract a wider range of customers in addition to bargain hunters. This required adding new products and brands not available previously through them.

COMPETITIVE LANDSCAPE

Three discounters form the channel, and no new entries are expected

There are three international operators that have built up a large network of outlets covering all towns with a sizeable population within their close catchment areas. As of 2018, they had been active in Hungary for more than 10 years, and no other retailer brands are expected to open outlets under this retail channel.

Discounters are among the most effective grocery retailers with regard to selling-space utilisation

Discounters, with 949 sq m of average selling space per outlet, lead grocery retailing in terms of efficiency based on selling space and their competitive advantage is set to grow further during the forecast period. Constantly refilling shelves and fridges with products to prevent stock outages is a highly labour-intensive task and requires well-organised logistics as well.

Penny Market and Aldi add extra services

Penny Market, which runs the largest number of discounter outlets, and Aldi Magyarország Élelmiszer have added extra services to attract more traffic or to increase the appeal of their stores at the expense of alternatives in the neighbourhood. Outdoor parking spaces are used mostly as indoor floor space is highly limited.

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