Discounters are mutating into supermarkets, adding brands, freshness and service. Will Lidl and Aldi sacrifice their success model for quick sales gains? Or is “supermarketisation” the next step towards international leadership?
Hard discount is dead. While some are celebrating what they have always known – namely that selling unbranded products from pallets cannot be successful – there is now a much greater danger developing from exactly these retailers: Smart discounters that are mutating into supermarkets, spearheaded by Lidl and Aldi Süd and Nord.
Supermarketisation is the buzzword. It’s a trend that stems from a certain necessity – namely to generate new growth in stagnating, saturated European markets.
However, this does not limit its prospect of success, nor limit its danger to traditional grocers. Lidl and Aldi are encroaching more than ever into the supermarkets’ core areas – freshness, service, brands and promotions. Unlike established players, discounters still have a lot of potential: They can simply expand their product range as desired – and this is certainly their key weapon for the future.
Aldi will become the number two in European grocery retail this year, behind Schwarz Group (Lidl), and ahead of well-established giants Carrefour and Tesco. Bad news for the full-range retailers, the growth prospects of Lidl and Aldi are much brighter than those of other players, as LZ Retailytics data shows.
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