The winners and losers in the Danish groceries trade
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The winners in the groceries trade market have adapted to the busy, digital consumer and the senior consumer. The old dogmas about bulk purchase no longer apply in a world where about 9 pct. of household groceries end up as food waste, just as we see a shift towards quality rather than quantity.
These are some of the trends sketched in the new report ”Effekt og effektivitet - Dansk Dagligvarehandel 2003-2013” (Effect and Efficiency - The Danish Groceries Trade 2003-2013). The report gives a picture of the consumer in 2015 and points out characteristics of the winning and losing recipes among Danish groceries chains.
- More consumers have a busy everyday life, they have an increasing preference for digital shopping, and more consumers shop small quantities of groceries because they live alone. Consumers have changed, but our report shows that many shops have not yet adapted to their customers' new situation, says Per Østergaard Jacobsen, external lecturer with the Department of Operations Management at CBS.
Together with Mogens Bjerre, Associate Professor with the Department of Marketing at CBS, he is behind the report.
The success story
The discount chain Rema 1000 has been able to achieve a position as consumers' preferred discount shop, the report shows.
- Rema 1000 has really picked up on customers' shopping behaviour. With the increasing number of single persons households, which have a different volume need, local discount shops have become a great success. You don't need to buy a 12-pack of something to get a cheap price, says Per Østergaard Jacobsen.
Shops will close
On the other hand Dansk Supermarked, which is behind shops like Bilka, is facing serious challenges. Per Østergaard Jacobsen believes it has to do with a bigger international trend of the mega shop concept failing. In the US the big shopping centres are closing right now despite growth economy, he points out.
- The big shop units are not the most efficient in Denmark. The discount shops, however, are cheaper and in many cities you will find them right around the corner and they are open until 22:00.
But although the big shop units are not efficient, the report shows that Denmark has particularly many big shops. Denmark has a 25 pct. bigger sales area in Danish retail per citizen than the average for 27 other EU countries. Mogens Bjerre, Associate Professor at CBS, thinks this is a challenge.
- It's too much. Denmark will see a lot of shops closing in the future. Several groceries chains are therefore revising their shop concept. Of course everyone should not do what Rema 1000 are doing, but they need to find an equally unique profile, he says.
For further information please contact Per Østergaard Jacobsen, external lecturer at CBS, via email: pj.om@cbs.dk or tel: 3815 2466 or Mogens Bjerre, Associate Professor at CBS, via email mb.marktg@cbs.dk or tel: 4032 3221