Discounters in the Netherlands

PROSPECTS

Discounters grows largely in line with modern grocery retailing

Discounters returned to current value growth at a level above that of modern grocery retailers in 2018, thanks to the continued expansion of Lidl – but only marginally so. Together with weaker growth in 2017, which was lower than that of modern grocery retailers, this indicated that the advance of discounters over the review period had stalled.

Success of budget private label weakens appeal of hard discounting

Compared to countries such as Germany, discounting has traditionally been less successful in the Netherlands. Socioeconomic reasons include the lower level of inequality and a lower share of the population living below the poverty threshold.

Greater focus on name brands, fresh food and baked goods

With the forecast period growth prospects of hard discounting limited, both Lidl and Aldi will likely focus increasingly on positioning their banners as similar to regular supermarkets, albeit offering a more attractive price level. One way to achieve this is by expanding their offerings of name brands.

COMPETITIVE LANDSCAPE

Lidl continues to pull away from Aldi

Growth in Lidl Nederland BV store sales consistently outpaced that of its rival Aldi Nederland BV in recent years. This trend continued in 2018.

Major store design overhaul has not yet reversed Aldi’s fortunes

In 2017, Aldi Nord, the parent company of the Dutch subsidiary, announced plans for large-scale remodelling/refurbishment of many of its stores, including those in the Netherlands. This resulted in some outlets already being refurbished, with others still in the process.

Tobacco products and energy drinks removed from discounters’ shelves

Another development underscoring the evolving brand positioning of Aldi and Lidl in the Dutch grocery retail space was the decision to stop the sale of tobacco products and energy drinks through their stores. With tobacco legislation turning increasingly unfavourable, many grocers have eliminated these products from their assortments in a bid to create a more wholesome image.

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