Discounters have evolved a great deal from their initial simple model of offering just low price and private label products. In the past 10 years, hard discounters have become more much experimental retailers, trialing new growth tactics and appealing to a broader shopper base.
Shopping at discounters now resembles the shopping experience in super- and hypermarkets, with a greater focus on A-Brands, longer opening hours, loyalty programs, and advertising.
But that’s just the beginning. Hard discounters continue to become much more sophisticated in their business models, offering permanent listings for A-brands, including price promotions, much greater focus on their assortment, focus on sustainability, overhaul of their private label, and big efforts in redesigning their stores.
SNAPSHOT ON THE HISTORY OF Hard Discounter GROWTH
Historically, hard discounters had store expansions to thank for their buoyant growth. In 1990, there were approximately 15,000 hard discounter stores in Europe — a number which expanded to 42,000 in 2017. In Europe as a whole, the limitations of growth by new openings has been reached.
Despite the number of stores stagnating in recent years, discounters still managed to gain share. So where did this growth come from?
Hard discounters, which drive growth in discounters overall, have turned to A-Brands as a driver. A-Brands drive half of 8.8% overall Discounter growth, with only 30% market share — outstanding performance compared to PLB. Moreover, A-Brands create additional net demand in Discounters by expanding assortment, while PLB‘s new listings fail to do that.
But simply listing your brand at hard discounters is no guarantee of success. In our next article in this series, we uncover how we can predict if a new brand entering discounters will be successful. Stay tuned for our next edition, or contact us for an in-depth presentation on how to grow with discounters.