Our view: highlights from the home of discount

Date : 02 May 2013

Germany is the heartland of discount retailing and it remains the most popular format in the market, with multiple discounters operating successfully in the country. We recently visited several German cities to bring you the key developments within the channel.

1. Greater focus on health & beauty

Across the discount channel a growing focus on the health & beauty (H&B) category was apparent. The most notable example was in Edeka's discount format, Netto Marken Discount where H&B has been significantly up-weighted. It now offers 1,000 SKUs and is dedicating more space and introducing clear zoning within the category. This represents a considerable change of direction for the discounter and the development is heavily communicated across the store. Elsewhere in the channel, Lidl is listing a growing number of top branded SKUs within H&B, while Aldi is expanding its range through private label, primarily its Lacura range.

2. Using discounters to maximise brand exposure

Suppliers are using the discount channel to effectively leverage their leading brands. This is happening with increasing frequency across the wide spectrum of discount retailers in the German market. A range of mechanics are being used to maximise brand exposure, including dedicated fixtures, branded point-of-sale (POS) and free standing display units. With discounters increasingly keen to promote their branded offer, they are proving they can offer as much potential for collaboration as other channels, giving those branded suppliers not engaging with the channel something to think about.

3. Enhancing the chilled offer

Quality has always been central to the discount proposition, in addition to strong price positioning. However we are seeing even more communication in-store, particularly around chilled, shouting about this quality. Aldi Süd has revamped the entire chilled area of the store, with enhanced merchandising above its fixtures. Within fresh meat and poultry, Lidl is using POS to highlight its German sourcing of meat, while at Penny the entire category has been refreshed, with new branding in its private label and awards for its products clearly highlighted above the fixtures.

Want to know more?

Then download our new Special Analysis report on Retail Analysis that looks at these trends in more detail and examines further developments within the channel.