German supermarkets draw even with discounters

Supermarkets and discounters compete head-to-head in Germany. According to the latest data from the GfK-CPS Consumer Panel Germany, both segments in Germany were able to increase their sales by 5% in March, the most recent month for which figures are available. In the first quarter of the year, the supermarket channel led by Edeka and Rewe was even able to grow slightly faster at 5.7% compared to the 5.4% growth of the discount channel.

The figures might point to a trend reversal, given the slowdown in inflation. According to Destatis, Germany’s Federal Statistical Office, food prices in March 2024 fell by 0.7% year-on-year. The deflationary result was underpinned in particular by a 20.1% year-on-year drop in the price of vegetables. According to the statisticians, this was the highest level of deflation since February 2015, when food prices fell by 0.2% year-on-year.

Over the past two years, discounters have been able to increase their market share in Germany. At the end of 2021, according to GfK-CPS, the discount channel accounted for 34.8% of the German FMCG market. By the end of 2023, their share had increased by 3.0 percentage points to 37.8%. Over the same period, supermarkets lost ground, down 0.8 percentage points from 29.4% to 28.6%. Lidl, Aldi & Co. did not necessarily gain exclusively at the expense of Edeka, Rewe and other supermarkets. The position of the specialized stores segment deteriorated significantly. Their share fell from 15.0% to 12.5%.

This development is mirrored by German grocery market leader Edeka, who has just announced its results for the past financial year. The group’s annual turnover in 2023 rose to 70.7 billion euros. The 6.7% increase is well below food inflation, which was 12.4% over the same period, according to Destatis. Accordingly, Edeka saw its market share fell slightly by 0.1 percentage points from 29.5% to 29.4% over the period. According to Edeka, one of the reasons for this is that supermarket customers have been able to shift their purchases more towards promotional discounts and private labels, an option less available at the discounters.

Within the Edeka Group, it was the brand-driven Edeka discounter Netto Marken-Discount that led the way with growth of 8.5% to 17.1 billion euros. Within the supermarket segment, the independent Edeka retailers were the best performers, with net sales up 7.7% to 39.3 billion euros on a comparable store base. The company-operated portfolio of supermarkets, however, lost 3.4% in net sales to 8.5 billion euros, partly due to the fact that the number of company-owned stores fell from 1,015 to 940 during the period.