Today, we’ll take a look at the most successful supermarket chains in Europe
Top 7 supermarket chains in Europe. Source: unsplash.com
It’s not a coincidence that supermarkets all over the world have remained open throughout the strictest pandemic lockdowns. Grocery retail is an essential business in any country. Of course, people can also buy food at small local shops and farmers’ markets.
Moreover, the market share of the supermarket chains in Europe has been steadily falling for a while. According to Forbes, the main reasons are strong competition from discount stores and convenience stores, smaller households, and the rapidly aging population.
However, supermarkets still have a number of advantages:
- they sell all essentials in one place
- most of them work late hours or even 24/7
- there’s often an online ordering and delivery option
- it’s a self-service system from walk-in to the checkout
- many supermarkets also include ready-made food sections and even small cafeterias
Therefore, as long as they are situated nearby and don’t require long trips, supermarkets still remain the main shopping destination for those looking for groceries in Europe. About 41% of all grocery sales take place there. Supermarkets are followed by hypermarkets and discount stores with 23% each.
1. Schwarz Group (Lidl and Kaufland), Germany
The Schwarz Group is a family-owned multinational retail group that operates a chain of supermarkets and hypermarkets under the banners: Kaufland, Handelshof, and Kaufmarkt, and discount stores under the Lidl brand.
Schwarz Group reported a net sales increase of 8.6% to €113.3 bn for its financial year 2019/20. Whereas Lidl posted one of its strongest growths in recent years with net sales up by 9.5%, Kaufland sales also grew by 4.5%.
Kaufland is currently present in 8 European countries operating almost 1300 stores. The Group also had ambitious plans to expand to Australia that recently failed. Kaufland even started to hire staff, build a $450 million distribution center in Victoria and purchased other sites across the country. However, at the beginning of 2020, the company abandoned this project, concentrating fully on the European market. Now the largest European supermarket chain wants to take over 101 locations of its competitor Real.
2. Carrefour, France
Carrefour is one of the oldest and most respectable retail brands in Europe. The Carrefour group opened its first hypermarket in 1963, being one of the first retailers in Europe to introduce this concept. Throughout the years, the supermarket chain has expanded internationally being present in Europe, Middle East, South America, Africa, and Asia. It managed to enter even the most prospective markets such as China, Brazil, and India.
Carrefour has also established itself as a socially-responsible leader, concentrating on food quality and traceability, the development of organic products, the support of agricultural sectors, the reduction of food waste, limiting plastic packaging, animal welfare, etc. The super- and hypermarket chain exceeded its targets on the “CSR and Food Transition” index, with an overall achievement rate of 114% in 2019.
The financial results of 2019 showed a steady success in Carrefour’s operational strategy. Its acceleration in sales exhibited growth of 3.1% on a Like-for-Like (LFL) basis (vs +1.8% in 2018). At the same time, the Group’s net income went up significantly to €1,314m vs €(582)m in 2018.
3. Aldi, Germany
The Aldi global empire has over $80 billion in estimated annual revenues. Total Aldi Group revenues in Germany amounted to almost €29.5 billion in 2019, showing steady growth during recent years. It also generated a gross revenue of €11.75 billion in Great Britain in 2018.
Aldi’s ambitious plans are to become the third-largest grocery chain out there by 2022, behind Walmart and Kroger. Currently, it’s concentrating on expanding the UK operations, has pledged to invest £1.3 billion in new and existing stores and its distribution centers. Aldi expects to open 100 new UK stores across 2020 and 2021 – with a long-term target of 1,200 stores by 2025.
The chain is also investing in innovations. It has recently introduced a trial of a click-and-collect service. Under the new scheme, shoppers can order any of Aldi’s items from the in-store stocks. Next, customers are offered time slots to arrive at dedicated click-and-collect points in store car parks to pick up their shopping bags.
3. Tesco, UK
This British multinational groceries and general merchandise retailer has shops in seven countries across Asia and Europe and is the grocery market leader in its home country. In its 2018/2019 financial year, Tesco’s annual revenue amounted to almost £52 billion in the UK and the Republic of Ireland – an increase of approximately 7 billion pounds compared to the prior fiscal year. Group sales for 2020 are estimated to reach £57,3 billion, with revenues soaring to £64,7 billion.
Except for the supermarkets and stores, the British retailer also operates Tesco retail bank. It has over 5 million customers using bank services such as credit cards, personal loans, savings products, home & pet insurance.
4. Edeka, Germany
One of the largest German supermarket corporations was holding a market share of 20.3% in 2017. The group also owns the discount supermarket brand Netto. Edeka’s revenue grew steadily during the last decade, hitting €55.7 billion in 2019. The chain is also one of the regional leaders when it comes to customer satisfaction levels. Edeka is operating a chain of over 13,000 supermarkets providing jobs to 376,000 employees across the country. The chain is planning some expansion in the nearest future. Following the acquisition of Real by SCP Group, Edeka has shown interest in acquiring up to 70 Real locations.
5. Rewe Group, Germany
The REWE Group is the second-largest supermarket chain in Germany behind EDEKA. It also operates in 10 other European countries. Founded in 1927, REWE is a cooperative owned by some 3,000 of its independent retail members. The sales lines include REWE, REWE CENTER, REWE CITY, toom and BILLA supermarkets, and consumer stores, nahkauf local markets, the discounter PENNY, the toom DIY stores, and B1 Discount DIY stores as well as ProMarkt consumer electronic stores.
In the 2019 business year, the total external revenue of REWE Group rose from €61.2 billion to €62.7 billion. The foreign share of revenue increased slightly to 29.2%. REWE retailers in Germany increased revenue by 9.1% compared with the previous year. Thus, REWE retailers grew stronger than every other group in the German food retail sector. The number of stores of REWE retailers in Germany increased in 2019 by 92, from 1,718 to 1,810. At International Full-Range Stores, with the supermarket and drug store activities, the revenue rose by 8.2% (by 7.9% adjusted for exchange rate effects) from €9.4 billion to €10.2 billion.
Currently, the Group is going to exit the Ukrainian market with Billa reporting below market growth between 2016 and 2019, at less than 4% annually. In the past, Rewe has withdrawn its Billa brand from markets where it has underperformed, such as Croatia and Italy, to improve its profitability and to focus on more prospective markets.
7. Auchan, France
The French multinational retail group is one of the world’s largest retailers with a presence in France, Italy, Spain, Portugal, Luxembourg, Poland, Romania, Hungary, China, Taiwan, Russia, and Ukraine.
Since 2017, a number of unmanned convenience stores are also being operated by Auchan in China. Auchan signed a deal with HiSense to enable the expansion of the Auchan Minute digital trade model. Customers have to identify themselves with an app prior to entry and scan their products at the cash register. They can use WeChat and Alipay apps to pay. For this project, Auchan uses 18 sqm containers filled with 500 products. These miniature supermarkets are open 24/7. The retailer also plans to introduce the same concept in Europe, starting with its home country.
On 30 June 2020, Auchan Holding recorded the half-year results: €22.5 billion in consolidated revenue excluding taxes. For comparison, the Holding gained €46 billion last year. On the same date, Auchan operated 918 hypermarkets, 741 convenience stores, and 352 ultra-convenience stores across 12 countries. The number of franchised stores was 282.
SEE ALSO:
