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Trading with the Hard Discounters
by Nick Ryan, Acumen

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As the hard discounters forge ahead with their aggressive geographic expansion strategy across Europe, it is becoming harder for branded goods manufacturers to shun this rapidly growing channel of trade.

The Hard Discount channel is the fastest growing channel in European grocery retailing with retailers such as Aldi and Lidl having already established a strong foothold in many Western European markets. The flexibility of the small store format, and local value offering means that they are well suited to open stores in urban neighbourhoods. This has enabled them to expand in Western Europe while pushing ahead into virgin territory in Eastern Europe and entering the consolidated Scandinavian markets, traditionally dominated by Soft Discounters.

It is important to distinguish between the Hard Discounter and the Soft Discounter. The distinction lies in the product offering: Hard Discounters are characterised by a predominance of low price own label (Aldi, Lidl) while Soft Discounters will stock mostly brands and carry fresh food (e.g. Kwiksave, Penny Market).

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