Discounters in Nigeria

PROSPECTS

Discounters is an emerging channel, driven by the growth of younger, convenience-driven consumers

Discounters remained an emerging channel in 2019, with only two players present on the landscape; Dia and U Save. Despite this, awareness of the channel is growing due to its favourable low prices and wide variety of products.

Increasing consumer awareness of the benefits of discounters and its low price points will drive growth across the forecast period

The low prices of discounters has attracted consumers who are price-sensitive, to shop at discounters for their daily needs. However, the concept of discounting remains undeveloped in modern retailing in Nigeria as many consumers who use modern retailers like to shop in more convenient and larger sized supermarkets and hypermarkets, while the majority of Nigerians prefer to shop at traditional open markets, where prices are competitive, and bargains can be found.

Price-sensitive consumers are set to drive up value sales in discounts, which will further benefit from new players entering the landscape

The slow growth of discounters has been affected by the slow economic activities in Nigeria. However, across the forecast period, there will be a boost in trade, and consumers purchasing power is expected to increase.

COMPETITIVE LANDSCAPE

Dia continues to lead discounters, benefiting from locating itself within residential neighbourhoods where demand is high

First Master Retailers with Dia continued to lead discounters in 2019, due to the wider spread number of outlets it has, mostly in neighbourhoods with a high population of consumers. The operator of Dia focuses on opening outlets close to residential neighbourhoods, aiming to attract busy consumers in these areas who are looking for convenience and do not want to travel long distances for their shopping.

Newer player U-Save ranks second, driving sales through offering cost-savings to consumers

In 2019, the second and only other discounter in the landscape, U-Save, continued to have only one outlet in Nigeria. U-Save was launched across the review period by Retail Supermarkets Nigeria, the owner of the successful hypermarket chain Shoprite.

As discounters continues to grow, there will be an increase in competitors on the landscape

In 2019, discounters was still an emerging area in the landscape and is therefore expected to see more entries in future, driven by the price sensitivity of consumers who are looking for low priced goods, partnered with the convenience it provides.

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