Discounters’ share of French food retail market fading: Bord Bia study

Discount stores’ share of the French food retail market is fading, according to new Bord Bia research.

The discounters market share in France peaked at 15% of the total retail market in 2009, but has progressively lost ground since, now accounting for only 11.9% of the market in Apr 2013.

“The overall decline in the French discount market is primarily attributed to two factors, firstly the changes in retail legislation in France in 2009, which gave the mainstream multiples more freedom to negotiate with suppliers and subsequently gave rise to more frequent price wars; and, secondly, the growth in the ‘Drive — click and collect channel’,” notes Bord Bia’s Paris office manager Noreen Lanigan, writing in the latest edition of Bord Bia’s trade magazine Food Alert.

“And contrary to French consumer behaviour during the 2008 recession, when consumers turned to the discounters’ value propositions, today’s consumers are indulging in ‘at-home dining’ to compensate for budget sacrifices on holidays and dining-out,” adds Lanigan.

The Bord Bia manager notes that in 2012 Lidl closed more stores in France than they opened. The store’s Q1 2013 turnover is back 5% and sales volumes back 8%. Dia, Norma, Netto and Le Mutant also closed a number of stores in 2012, with Aldi and Leader Price opening only eight and five stores respectively.

“As the price gap closed between the major multiples and the discounters in France over the last number of years, the discounters responded by introducing branded products, which now account for approximately 20% of their turnover,” notes Lanigan.