Supermarkets in Portugal

PROSPECTS

Supermarkets set to remain the leading channel in grocery retailing

Supermarkets will likely remain an obstacle to the growth of other grocery retailing channels, especially those which do not focus on proximity to consumers. Beyond ongoing investment in new outlets in order to cater for consumer demand for proximity, the major supermarket chains are anticipated to continue to invest in aggressive marketing activities and maintain a strong focus on price competitiveness and product differentiation.

Supermarket channel offers further potential for growth

Operators believe the supermarket channel in Portugal offers further potential for growth and hence are continuing to invest in it. After opening its 100th outlet during 2018, Sonae announced that it will invest further in opening 70 new outlets by 2020, while ITMI - Norte Sul Portugal (Grupo Os Mosqueteiros) has embarked upon a EUR200 million investment programme which will see the group open 63 new outlets by 2020.

Consumers’ purchasing habits forcing supermarkets to be creative

According to studies published in the media, for example by the online newspaper Dinheiro Vivo, Portuguese consumers are buying fewer products but are spending more on each trip to the supermarket. Despite the channel’s stronger value sales, operators are becoming worried by the decline in volumes and so are starting to get creative in order to reverse this tendency.

COMPETITIVE LANDSCAPE

Pingo Doce remains the leading player thanks to aggressive marketing, new outlets and a focus on product diversification

While Modelo Continente Hipermercados’ Modelo Continente and Modelo Bom Dia are undoubtedly popular and trusted brands, Pingo Doce and its namesake brand remained the clear leader in the supermarket channel in 2018. On the one hand, this can be attributed to Pingo Doce’s aggressive price policy, while on the other it has benefited from ongoing outlet expansion, thus being able to get closer to more consumers.

Central purchasing unit of ITMI and Dia Portugal fails to bear fruit

In 2015, ITMI - Norte Sul Portugal (Grupo Os Mosqueteiros) and Dia Portugal Supermercados, the owners of the Intermarché and Minipreço banners, respectively, decided to invest in a combined central purchasing unit with the objective of becoming more competitive. Nevertheless, Intermarché decided to terminate the agreement in order to redefine its strategic objectives in terms of purchasing.

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