IF THE UK’s biggest supermarkets have any scraps of hope left that the discounters will soon stop nipping at their market share, they should abandon them now. Discount is set to be one of the fastest growing channels for years to come, adding €40bn (£32bn) in sales across Western Europe by 2018, according to a new report on the grocery sector from Planet Retail.
While hypermarkets and superstores will remain dominant, they are set to grow far more slowly. In four years’ time, discount channel sales are expected to have raced up to €211bn against the giant stores’ €385bn. Convenience stores will grow faster, but with just €72bn in revenue forecast for 2018, it will remain a secondary story.
If you want to see what all of this means in practice, just look at discount stalwart Lidl and its parent, the Schwarz Group. It is already estimated to have hit total banner sales of €64.6bn in 2013, running Carrefour (€65bn) a close second and handily ahead of Tesco (€61bn).
By 2018, Planet Retail thinks Schwarz Group will be top in Europe, with sales topping €80bn, while Carrefour trails it, just breaking above €70bn in sales.
Most striking of all, while the UK is ahead in developing convenience stores, its growth in discount retail is just beginning. The discounters’ compound annual growth rate across Europe 2013-18 is forecast at four per cent. In the UK, it looks set to top 10 per cent. Brace yourselves.