Thursday, December 23, 2021
With caviar and champagne
Discount stores are fighting for Christmas sales
Especially in times of the pandemic, consumers treat themselves to a little more luxury at Christmas – the price takes a back seat. The question is who will benefit more from it? Supermarkets or even the discounters, which now have rows of their own luxury items?
Caviar and champagne, venison medallions and beef fillets: In good time for Christmas, Germany’s discounters are again adorning themselves with a touch of luxury in the Corona year 2021. Nevertheless, Aldi, Lidl and Co. will find it difficult to stand up to the supermarkets in the busiest weeks of the year. This also has – but not only – to do with the high corona incidence figures in Germany. “The supermarkets will again be the big winners in the Christmas business this year,” predicts Fred Hogen from the market research company NielsenIQ.
“At Christmas in particular, the discounters are trying to counter the triumphant advance of the supermarkets with their own premium offers. But that only helps to a limited extent.” The fact is: The weeks before Christmas are a great challenge for Aldi, Lidl and Co. every year. Because during the Christmas season, consumers pay less attention to money and more to quality. The market share of the supermarkets increases every year in the weeks before the festival, while the market share of the discounters decreases.
In pandemic times, however, this is probably even more true than usual. “In the corona pandemic, people want to pamper themselves a little, especially at Christmas,” observes Hogen. In the first Corona year 2020, 25 percent more champagne was sold at Christmas time than in the pre-crisis year 2019. And luxury is more the domain of the supermarkets than the discounter.
Specialties from the discounter
Aldi, Lidl and Co. have been trying for years to benefit from the joy of Christmas consumption with their own range of luxury products. This year is no different. In addition to minced meat, whole beef fillets suddenly found themselves in the freezers before the festival, next to sliced young Gouda, a fine French Tête de Moine, which costs many times as much.
This year, Lidl also started a cooperation with the Sylt cult restaurant Sansibar in good time before the festival and brought the first products from caviar to “Schickeria Gin” with gold particles to the branches at the beginning of December under the Sansibar Deluxe brand. “The prominent partner could help convince customers of the value of the private label”, judged the industry journal “Lebensmittel Zeitung”.
In the second year of the pandemic, Aldi lures with the slogan “Finally Christmas again. With everything that goes with it.” The discounter is not only relying on a particularly high-quality range of groceries, but also increasingly on a wide range of toys – from dollhouses to remote-controlled drones – and wants to benefit from the falling number of toy shops in Germany.
Supermarkets are chasing the next record
But despite all the efforts of Aldi, Lidl and Co., there is little to suggest that the discounters will succeed in stealing market share from the supermarkets at the festival of all times. In the first ten months of this year, the supermarkets fared significantly better than the cheap competition and increased according to the market research company GfK their sales by 4.6 percent compared to the previous record year 2020.
The discounters, on the other hand, lost 1.4 percent of their sales and thus lost further market shares. GfK expert Robert Kecskes said that so far, supermarkets in particular have benefited from concerns about infection and tougher corona measures. How and why this should change in the Christmas business is “currently not apparent”.
A survey by strategy consultancy Oliver Wyman published at the end of October showedthat in the current pandemic, there are two main factors that decide where to buy: the easy accessibility of the store and the choice of products. Both are more of the strengths of the supermarkets. The price issue, which in the self-image of the discounters still overrides everything else, was ranked fourth in the pandemic. That is why it is also the supermarkets that currently have the upper hand in the pandemic duel with the discounters, emphasized Alexander Pöhl from Oliver Wyman.
But even if the discounters will not really be able to stand up to the supermarkets in this Christmas business, their commitment to “small luxuries” definitely makes sense. “If the discounters did not counter this with their own premium offers, they would lose even more market share to the supermarkets during the Christmas season,” says Hogen. And even if the low-cost providers could not keep up with the sales growth of Edeka, Rewe and Co. in the strong sales weeks before Christmas, one thing is certain: “Even the discounters make significantly more sales than usual in the days before the festival.”