Schwarz Group will overtake Carrefour as the largest retailer in Western Europe by 2018. A report from Planet Retail says, “The discounters are now a growing force in the Western European grocery landscape, so much so that a change is in store at the very top. By 2018, according to our forecasts, Schwarz Group will overtake Carrefour as Western Europe’s largest grocery player, generating sales of more than 80bn euros”.
This shift in European retail is fuelled by the near-unstoppable growth of the format across Western European markets.” Planet Retail expects “the discount sector to grow sales at a compound annual growth rate of more than 4% in the five years to 2018, with Schwarz Group outperforming the sector as a whole with growth of almost 5%. This compares to the hypermarket and superstore channel with growth of less than 2%.”
In the meanwhile Aldi and Lidl make big UK growth plans: each of the discounters aims to have more than 1,000 stores in the years ahead. Aldi announced plans to double its size to 1,000 stores in the next seven years. It plans to accelerate store openings from 50 to 65 a year from next year. If it achieves that rate of growth every year, it will hit 1,000 stores by 2021. Lidl wants to increase its store portfolio from 600 in 2013 to up to 620 by the end of this year. The discounter aims to eventually reach 1,500 stores across in the UK. Lidl reports that its turnover in UK jumped 20% to £3.3bn last year. Aldi and Lidl continue their strong growth this year. The latest data shows that Aldi’s market share has climbed to 4.7%, up from 3.6% and Lidl’s market share rose to 3.6%, up from 3.1% compared to the year before. If you can’t beat them, why not join them?
That seems to be the strategy of Sainsbury’s as the retailer announced plans to bring the Netto brand back to the UK to take on the rise of Aldi and Lidl. Sainsbury’s has agreed to form a joint venture with Dansk Supermarked, the owner of the Netto brand, to open discount stores in the UK. Mike Coupe, Sainsbury’s new leader, says that Netto will compete “toe-to-toe” with Aldi and Lidl. He explained that Sainsbury’s struck the deal because it “wanted a share of the action” in the fast-growing discount sector. He predicted the discounter market could double in size in the UK over the next five years, which would mean discounters account for 15% of all grocery spending. Under the joint venture, Sainsbury’s and Dansk Supermarked, the owner of Netto, will open 15 trial stores in the north of England. If the trial is successful, the stores will be opened across the country.