Hypermarkets in Denmark

PROSPECTS

Changing shopping habits pose challenges

Hypermarkets faces a number of significant threats. Consumers are increasingly shifting from regular large-scale shopping trips to the kind of out-of-town locations favoured by hypermarkets to more frequent, less regular small-scale local trips as they make purchases in the flow of their everyday lives.

Problems of finding a distinctive positioning

Grocery retailers’ efforts to adapt to changing consumer shopping habits are leading to a blurring of the distinctions between channels and bringing retailers into increasingly direct competition. Discounters’ shift to larger formats with broader product ranges, more branded goods and a focus on fresh produce poses a notable threat to both supermarkets and hypermarkets.

Internet threatens non-grocery sales

The balance of hypermarkets sales shifted further towards grocery products in 2018, as the rise of internet retailing continued to have a significant impact on store-based non-grocery sales. While grocery value sales through hypermarkets stagnated in the final year of the review period, hypermarkets’ non-grocery sales dropped 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 the internet.

COMPETITIVE LANDSCAPE

Bilka aims to provide greater convenience and respond to online competition

Salling Group dominates the hypermarkets channel in Denmark, operating the two leading brands, Føtex and Bilka. Looking to address the considerable challenges facing the hypermarkets channel, particularly in terms of convenience and the rise of internet retailing, Dansk Supermarked trialled the grocery “click & collect” service, Bilka To Go, in two of its Bilka hypermarkets, in Tilst, Aarhus, and Hundige, Copenhagen, towards the end of the review period.

Coop Danmark partners with pharmacy chain

The only significant player in hypermarkets other than Salling Group, Coop Danmark is primarily focused on the supermarkets and convenience stores channels, in both of which it is the dominant operator. Nonetheless, the company continued to work to strengthen the position of its Kvickly hypermarket brand in 2018.

Little incentive for new entrants

The challenges facing hypermarkets in terms of changing consumer shopping habits and increasingly direct competition with rival formats better suited to evolving demand trends mean that it is unlikely that the channel will attract new players during the forecast period.

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