Discount chains losing ground in France

02 April 2010

PARIS: Hard discount supermarket chains saw their share of the French grocery market decline last year, despite opening more stores and increasing their adspend.

According to a study by Kantar Worldpanel, discount specialists held a 14.1% share of the market in 2009, down from the total of 14.3% recorded in 2008.

More specifically, the average basket of goods purchased from these providers fell in value from €23.1 ($31; £20) to €22.7 in this period, while their penetration among the population "peaked" at 72%.

Lidl and Aldi, the German operators, were the only two companies in this sector which saw their positions remain largely stable, on shares of 4.8% and 2.5% respectively.

By contrast, Leader Price, operated by Casino, Ed, owned by Carrefour, and Netto, part of the Mousquetaires group, all posted contractions on an annual basis.

Reasons for this trend included price cuts and the roll out of extended own-label ranges by more up-market chains, removing the competitive advantage previously enjoyed by the deep discounters.

Carrefour, one of the world's biggest retailers, has attempted to utilise both of these approaches, while also offering a range of premium goods, as it seeks to cover all price points.

Data sourcexd from AFP; additional content by Warc staff