Variety Stores in Belgium

2020 IMPACT

Variety stores sees decline due to COVID-19 restrictions and trends, alongside heightened competition from supermarkets and hypermarkets

Whilst seeing declining value sales in 2020, this pattern is due to both COVID-19 factors and other trends and challenges driving variety stores. On the one hand, the declines seen in 2020 follow the declines already seen in 2019, albeit at a slightly steeper rate.

Action brand gives some dynamism to variety stores, whereas Blokker closes and sells out to Mega World

However, despite the challenges seen, there was some dynamism noted in variety stores in 2020. This is attributed to the continuous development of brands such as Action (Action Belgium BVBA), which has a strong focus on low prices and which also opened several new outlets in 2020.

Action Belgium maintains lead thanks to ongoing expansion, with further consolidation expected in the category

Action Belgium BVBA maintained its lead in variety stores in 2020, with over half the total company value shares. The player’s primary focus is on offering consumers the lowest possible prices and it maintains its position mainly thanks to its ongoing store expansion, a trend which is set to continue over the forecast period.

RECOVERY AND OPPORTUNITIES

Retail trends to bounce back after COVID-19, with variety stores to benefit due to offering lower prices than specialist retailers

As retail patterns return to normal after the threat of COVID-19 wanes, consumer demand for products such as apparel and homewares is set to increase again and boost sales through variety shops. Consumers are likely to continue to focus on price-to-value ratios and increasingly seek out the most affordable products, especially with the lower consumer spending power seen as a hangover from COVID-19.

Action to remain a major driving force behind category development and growth

One of the major driving forces behind positive performance for variety stores over the forecast period will be the development of the Action brand, which is expected to continue to lead the trends seen within the category. It will be interesting to see if the player does, indeed, start to offer e-commerce options over the forecast period, which will invariably inspire others to do the same.

Growth of Mega World also highly relevant for developments in variety stores

The growth of Mega World is also a factor to watch. The discounter brand entered variety stores and acquired many of the Blokker outlets as part of its strategic expansion plan, alongside its careful price positioning and ongoing focus on its online presence.