The hard discount market - France

The global Large Food Superstores (GSA) market is experiencing significant growth, with an estimated value of US$5,600 billion in 2020 and a forecasted CAGR of 4% to reach US$7,369 billion by 2027. This expansion is driven by rapid growth in emerging markets, particularly China, as well as increased consumer spending power. Supermarkets, which are preferred by 75% of French consumers for their food shopping, are gradually gaining market share over hypermarkets.

The hard discount sector, led by Lidl and Aldi, accounts for just under 11% of the market in France, reflecting the consumer trend towards value and quality over low prices alone. The French GSA market is also witnessing a tendency towards consolidation, with industry giants acquiring smaller hard discount stores. The trend towards upmarket and digital consumer preferences is reshaping the retail landscape, as seen in initiatives like Lidl's modernization and move towards a "soft discount" model.

Despite the decline in hypermarket dominance, which accounts for more than 58% of market share, the market dynamic continues to evolve with consumer habits, keeping supermarkets as key players in the food retail sector.

Main Trends Shaping Food Retail Demand in the French Market

The French food retail market, specifically the segment of Large Food Superstores (GSA), has been undergoing a series of transformative trends. Despite a 0.4% decline in the turnover of food superstores , there remains a strong consumer preference for supermarkets, which collectively hold a significant 53% of the market share as of the same year. Supermarkets are gaining ground at the expense of hypermarkets; consumers are increasingly drawn to the convenience and the perceived better adaptation they offer in line with changing shopping behaviors. A survey revealed that about half of the households considered their monthly food budget, which falls between roughly 200 to 500 euros, as excessively high. Nevertheless, while the budget for food remains mostly stable, with 39% of respondents not increasing their budget, nearly half of the consumers raised it, underscoring the essentiality of food consumption.

Meanwhile, the hard discount sector, dominated mainly by Lidl and Aldi, accounts for just under 11% of the GSA market. When choosing where to shop, French consumers prioritize factors like the quality-to-price ratio (52%), availability of the needed product (50%), store location (45%), and the presence of high-quality fresh products (45%). Interestingly, price alone is no longer the sole determinant as consumers become more discerning. Emerging trends also point to a demand for shopping comfort, healthiness, and ethical considerations. Consumers are shifting towards organic, eco-responsible products with clear information transparency. Fresh, local, and minimally processed foods attract greater interest, with organic products experiencing a 14% increase in purchase frequency. These preferences are even more pronounced among younger consumers, who are also driven by the convenience and time-efficiency of ready-to-eat meals.

The hard discount market, which witnessed a decline with the closure of 25% of discount stores between 2014 and mid-2019, sees a battle for dominance mainly between Lidl, with plans to open additional stores, and Aldi, which has recently acquired a large number of Leader Price stores. This consolidation denotes a trend towards a more concentrated market structure. Recognizing the stiff competition from established retailers, hard-discount stores such as Lidl embarked on a strategic pivot towards a "smart discount" model in 2012. This strategy entailed modernizing stores, offering higher-quality goods including fresh produce and private-label brands, enhancing shopping comfort, investing in social media branding, and maintaining

Major Contenders in the French Food Retail Landscape

• Traditional Supermarket and Hypermarket Giants Within France's dynamic food retail sector, certain established giants have carved out substantial market shares through a variety of retail formats, maintaining a strong presence throughout the country. Among these, renowned groups such as Leclerc and Carrefour stand out, with their diverse array of hypermarkets and supermarkets catering to every need of the French consumer. Leclerc's strategic emphasis on private label brands geared towards affordability, local products, and organic offerings has solidified its position in the market.
• The Evolution of Hard Discounters The hard discount segment in France has undergone a remarkable transformation, spearheaded by two German heavyweights: Lidl and Aldi. These brands initially captured market interest with their no-frills, cost-effective approach offering a limited range of private label products. In the face of increased competition and shifting consumer preferences, Lidl initiated a significant shift in 2012 with its turn towards soft-discount or smart-discount retailing. The revamp of Lidl's image included enhanced store aesthetics and an upgraded product range featuring fresh, bio, and high-quality items. Lidl's investment in marketing and the clever use of social media campaigns, such as the limited-edition Lidl sneakers, have amplified its appeal in the public eye, resulting in an enriched customer experience and elevated position in the market.
• Consolidation and Growth Plans As the traditional hard discount model faces challenges, consolidation has become a theme in the sector. The Casino group, which previously owned the Leader Price brand, made a strategic move by selling a significant part of the business to Aldi, enabling the latter to expand its footprint and intensify competition against Lidl. Meanwhile, the Les Mousquetaires Group's hard discount brand Netto is not backing down amid these changes, with ambitious plans to establish 500 new stores, potentially disrupting the duopoly trend between Lidl and Aldi.
• New Entrants and Niche Players Specialist brands are also notable participants in the market, with Picard focusing on frozen goods and Biocoop specializing in organic offerings. Both have witnessed growth in their respective niches, responding to the evolving demands for convenience and sustainable, healthy food options. In addition to these, the Carrefour group has launched its own hard discount venture, Supeco, which has already made its mark in Spain and is now making inroads into the French market. 

Inforamtion

• Number of pages : 30 pages
• Format : Digital and PDF versions
• Last update : 29/02/2024

Summary and extracts

List of charts

• Size of the global food retail market
• Ranking of the largest supermarket groups by sales figures
• Leading discount retailers worldwide by grocery sales
• Market share of food distributors
• Trends in hypermarket and supermarket sales
• Number of discount stores in France
• How often do French people go to the supermarket?
• Average monthly food budget per French household
• Where the French shop for their groceries
• Criteria for choosing a food retailer
• The qualities of hard discount chains
• Hard discount chains
• Loyalty to hard discount brands
• Product categories most frequently purchased in these stores
• Top 10 best-known discount chains
• Top 10 most frequented retailers
• The impact of inflation on French consumer behavior
• Inflation rate trend
• With inflation on the rise, do you prefer discount food stores?
• Discounters since the price hike
• Parts de marchés en valeur des principales GSA en France
• Number of retail employees
• Growth in the number of hard discount stores
• Number of food stores by format
• Répartition des ventes des GSA
• Growth in Action sales in France
• Trend in Normal sales
• B&M (Babou until the end of 2018) sales trend
• Growth in Gifi sales
• Reasons to visit non-food discount chains
• Types of products purchased in non-food discount chains
• Evolution du chiffre d'affaires des drives en France
• Evolution des parts de marchés de Lidl depuis le nouveau tournant pris en 2012