Grocery retailers across the Western European countries witnessed a year-on-year increase for fast-moving consumer goods (FMCGs) and many more with increase in consumers spending. Western European FMCG shopping basket witnessed 41% higher compared to the recent years. The factors affecting the increasing value of the shopping basket was due to inflationary price rises, consumers buying more premium and fresh goods. Spain’s is the leading country in the western European grocery retailing followed by Italy and Germany has the lowest growth.
The factors affecting the growth of the grocery retailing in Western Europe are the decreasing unemployment and increase in consumer spending income. Europeans increasingly spend their disposable income on online shopping and grocery retailing. Brexit, terrorism, electoral deadlines and economic stagnation may create a haze of uncertainty for the growth of grocery retailers. Grocery retailing is affected with inflation wars due to discounters, massive shopping channels, once-mighty hypermarkets losing steam and traditional grocers trying striving to exist and consumers are cracking digital commerce profitably.
According to the study “Grocery Retailing in Western Europe”, few grocers still thrive in Western Europe with average performance. Bare bones discount stores have swiftly spread across and account for more than one-third of all grocery sales in Germany. New formats of grocery retailing are flourishing that changed the supermarket and discount stores, such as Colruyt in Belgium or Mercadona in Spain. Also, households are getting smaller, aging population and population living in urban areas. All the convenience stores in Western Europe will witness a gradual growth over the coming years. The hypermarket share of the grocery retailing in Western Europe is dwindling along with smaller malls and the supermarket.
Lidl is the leading player in the traditional grocery retailers across the Western Europe; however, modern grocery retailers continue to make their share in the grocery retailing market. Fresh food and confectionery/snacks account for 61% of the growth in the grocery market in Western Europe. Consumers are buying more items along with alcohol which is at higher price. Fresh foods such as fresh meals, beer, fresh fruit & vegetables and mineral water witnessed a significant growth.
Western Europe has one of the most developed online grocery shopping regions in the world. Adoption of e-commerce and demand for online grocery shopping is not at same level in Spain, Netherlands and Germany. The grocery retailers face an increasing problem of overcapacity but with merchandising excellence, better store performance management, and excellent management the market is growing drastically. The grocery retailing business in Western Europe has grown more tumultuous than possibly anywhere else in the world and will grow over the coming years.
Ankur Gupta, Head Marketing & Communications