How Edeka-discounter Netto Marken-Discount differentiates against Lidl and Aldi

By: Rennack Sebastian Date: 2024. 12. 09. 09:25

Leveraging the brand sourcing expertise of its parent company and German market leader Edeka Group, Netto Marken-Discount offers a “value with choice” discount experience without sacrificing brand choice.

Sebastian Rennack
international retail analyst

Thanks to Edeka’s cooperative, regionally structured purchasing organization, Netto Marken-Discount offers a strong range of regionally sourced products, especially in the fresh food ranges.

In the bakery segment, Netto offers up to 65 SKUs baked from frozen dough pieces, as do the other discounters. However, unlike Aldi and Lidl, who source centrally or produce themselves, Netto sources its bake-off assortment according to company information from around 500 regional bakeries across Germany.

The discounter highlights its range of regional fruit and vegetables under its own “Heimat” (‘Homeland’) brand. QR codes on the packaging provide information about the origin of the products. Compared to competitors Lidl and Aldi, Netto Marken-Discount not only carries more private label brands, but also focuses on a more diverse portfolio of organic and health lines. The discounter offers around 400 organic-certified products under the BioBio private label. From summer 2023, the retailer also offers selected products under the stricter Naturland certification.

Netto Marken-Discount offers the largest selection of beverages of all German discounters. As the only discounter in Germany, Netto already achieves a re-use rate of 50 percent for beverage packaging, which is well ahead of the 40 percent target set by the European Union for 2040.

At the beginning of the year, Netto opened the largest cashierless Pick & Go pilot store in Europe with an assortment of 5,000 SKUs on 800 square meters.

Netto Marken-Discount achieved net sales of 17.1 billion euros in 2023, an increase of 8.5% year-on-year, of which 7.5% was achieved on a like-for-like basis. According to the company, at the end of 2023, Netto operated nearly 4350 stores in Germany, including nearly 70 specialized beverage stores.

At the entrance of the store, Netto places its fruit and vegetable assortment. The discounter emphasizes regional origin through its private label “Heimat” as well as a strong focus on its “BioBio” organic ranges, some of which are sourced from the organic association Naturland.

The bakery offers up to 65 items baked off in-store. Dough pieces are sourced regionally from more than 500 bakeries nationwide. Also for this product group Netto highlights its organic ranges.

Netto’s larger store area allows for additional space for branded products, regional items, and more extensive fresh food sections, aligning with its differentiation strategy within the discount segment.

The Edeka-discounter has rolled out electronic shelf labels across the whole range. Additional shelf tags mark special assortment, such as the BioBio organic own brand.

Specialty cheeses are showcased in a dedicated shelf unit. Price tags and flags on the packaging indicate the country of origin for each product.

To differentiate itself from other discounters, Netto displays its vegan products on the shelves. The regional origin (here from Lower Saxony) and the V-Label certification are also highlighted.

In the center of the store Netto displays weekly promotions under the ‘Aktion’ slogan.

Netto offers more than 5,000 items in its total assortment, significantly more than Lidl and Aldi, who offer up to 3,000 items.

Category navigation in the health and beauty ranges is facilitated by additional divider flags. As a new element natural cosmetics have been added to the assortment.

Non-food ranges take up less space on the shopfloor than at Lidl and Aldi. In contrast, the online-shop offers more than 100,000 items.

Netto offers the largest selection of beverages, many of which are offered in crates and reusable packaging.

Towards the checkout, alcohol products are displayed on a dedicated shelf. Inventory sensitive items and tobacco products are located in locked cabinets.