The 'Smart Discount' channel saw the highest growth in Portugal's retail sector during 2017, a new study has found.
The channel, which is mostly based around two banners, Aldi and Lidl, outperformed the wider market, according to a report by Kantar Worldpanel for Grande Consumo,
It found that the two discounters are seeking to adopt different growth strategies - while both retailers have a strong own-brand focus, Lidl is focusing more on hygiene and beauty, while Aldi's most dynamic categories are water, vegetables and greens.
The growth strategy of Lidl and Aldi includes store openings, but mostly remodelling, to make their respective stores less 'discount'. The discount channel is increasingly responding to quality concerns, store experience and social responsibility, combining the shopping experience with value for money.
Promotional Purchasing
Kantar Worldpanel data found that across the wider Portuguese market, promotion levels seem to have peaked, with the amount of products on promotion at the same level as the previous year (+0.3% compared to 2016).
Another trend is increased competition among the modern distribution banners, since 31% of Portuguese households bought at least once in five or more banners last year (+3.6% on 2016). This has led banners to seek growth either through the assortment/supply or via expansion/remodeling.
There have also been efforts to drive greater interaction with shoppers, through offers/activities for children, social actions, specific campaigns focused on new healthy trends and in-store activities
All banners have invested in renovating and improving their stores, with the aim of providing an improved shopping experience, but also to develop proximity and convenience store formats.
For its part, the online channel, which only accounts for 1% of the total spent in FMCG, has managed to recruit 95,000 more homes as buyers compared to 2014.
© 2018 European Supermarket Magazine – your source for the latest retail news. Article by Branislav Pekic. Click subscribe to sign up to ESM: The European Supermarket Magazine
