Hypermarkets in Denmark

PROSPECTS

Changing shopping habits pose challenges to hypermarkets

Hypermarkets continues to face a number of significant threats. Danish consumers are increasingly shifting from regular large-scale shopping trips to the out-of-town locations favoured by hypermarkets to more frequent, less regular small-scale local trips.

Hypermarkets lack distinctive positioning within modern grocery retailers

As grocery retailers adapt to evolving consumer shopping habits, distinctions between channels are becoming increasingly blurred, intensifying the competition between modern grocery retailers. Discounters’ shift to larger formats with broader product ranges, a wider variety of branded goods and a focus on fresh produce pose a substantial threat to both supermarkets and hypermarkets.

The rise of e-commerce undermines non-grocery sales in hypermarkets

Towards the end of the review period, the balance of hypermarkets’ sales shifted further towards grocery products as the rise of e-commerce continued to impact significantly on store-based non-grocery sales. Non-grocery sales in hypermarkets declined slightly as consumers preferred the convenience of online shopping, as well as the broad product offer, competitive pricing and capacity to compare prices provided by e-commerce.

COMPETITIVE LANDSCAPE

Salling Group maintains dominance of hypermarkets

Salling Group A/S continued to dominate hypermarkets in 2019, operating the two leading brands, Føtex and Bilka. Salling Group is investing in a new private label line, which is expected to be launched in both Føtex and Bilka stores by the end of 2020.

Coop Danmark diversifies through pharmacy partnership and surplus goods store

Coop Danmark A/S is the only significant player in hypermarkets other than Salling Group and is primarily focused on the supermarkets and convenience store channels, both of which it dominates. Throughout the review period and during 2019, the company’s Kvickly hypermarket chain saw a decline in growth in terms of both value sales and outlets.

Denmark offers little incentive for new entrants to hypermarkets

Hypermarkets is dominated by Salling Group with only Coop Danmark providing any other significant activity within the channel. Denmark lacks multinational hypermarket chains such as Tesco, Carrefour and Walmart.

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