Supermarkets in Portugal

PROSPECTS

Supermarkets focus on opening smaller proximity stores and expand offer of fresh local produce to compete with convenience stores

In value share terms, supermarkets remained the largest channel within grocery retailing in Portugal in 2019, with players continuing to adapt to changing consumer demands by opening smaller stores nearer to local neighbourhoods and focusing on expanding their offer of fresh, local produce as their main strategies. Ongoing initiatives such as Intermarché’s “Programa Origens” (Origins Program) and “Producers Club” from Modelo Continente Hipermercados are examples of players’ efforts to support demand for local production that have been developed over the years.

Supermarkets try various tactics to extend consumers’ visits

There has been an increasing trend for local consumers to make more frequent trips to grocery retailers at the end of the review period but their overall spend has decreased, forcing players to look at various innovative ways to encourage customers to remain in their stores for longer. This includes the removal of clocks in outlets, using soothing background music and introducing leisure areas such as coffee shops in addition to creating longer circuits around stores to reach basic products.

Further utilisation of digital solutions can help to enhance consumers’ in-store experience

Enhancing a customer’s in-store experience is paramount for many supermarkets as they face the challenge of proximity stores that offer a more personal service through the creation of relationships between store owners and consumers. Technology and digital solutions are also being increasingly utilised to improve the customer’s experience such as the use of electronic shelf labels which can not only be scanned but can be used to allow for price fluctuations on products that are overstocked or approaching their expiry date.

COMPETITIVE LANDSCAPE

Pingo Doce retains leadership with large network and further development of specific services

With wide network coverage of national territory in an extremely competitive landscape, Pingo Doce - Distribuição Alimentar SA retained its overall leadership in both current value and outlet share terms in 2019. Through its Pingo Doce banner, the retailer offers a strong product portfolio of both private label and brands, while maintaining an aggressive pricing policy and discounting campaigns to attract consumers.

Continente Bom Dia’s further expansion leads to share gain for Modelo Continente Hipermercados

Modelo Continente Hipermercados SA continued to gain value and outlet share in 2019 due to the strong expansion policy of its Continente Bom Dia banner. In addition to opening stores in large urban centres to benefit from greater proximity to consumers, the brand has also been expanding into regional areas where its presence is less significant.

Intermarché committed to supporting local production

Despite inactivity in outlet growth terms in 2019, Itmp Alimentar SA has plans for future expansion for its Intermarché banners in Portugal, with a focus on competitive pricing and a commitment to domestic production. The group brings together a number of independent operators through its franchising strategy, who own and fully manage their stores but benefit from the group’s common purchasing, logistics, development, quality and communication but they must adhere to all signage, store format and advertising to maintain consistency across the Intermarché chain.

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