At first glance, the power among European retailers looks well balanced. But, discount “made in Germany” and the US-American challenger Amazon are disrupting existing structures massively. In my previous post I explained the similar situation for the German market. The picture is similar on Europe base, as shown by the new Top 50 ranking published by LZ for the year 2017.
As in the previous year, the brick-and-mortar oligopolists dominate the European mass market in the LZ`s Retailytics 2017 sales ranking. Without exception, the continent’s top ten traders – all with gross annual sales above the 30 billion Euro mark – come from the three most populous countries, Germany, France and the United Kingdom. In this context, the dominance of the German retail groups in the Top 10 is not surprising. Schwarz Group, Aldi, Edeka, Rewe Group and Metro belong to the strongest economy in Europe and a country with more than 80 million inhabitants.
Gross-turnover 2017 in €b (excerpt)1:
- Schwarz Group (GER) 106.4
- Carrefour (FR) 64.9
- Aldi Group (GER) 61.7
- Tesco (GB) 56.8
- Edeka (GER) 56.8
- Rewe Group (GER) 54.7
- Auchan (FR) 43.3
- E. Leclerc (FR) 38.1
- Metro (GER) 34.1
- J. Sainsbury (GB) 31.3
- ITM – Intermarché (FR) 29.5
- Amazon (US) 26.9
The potential of the sales concept hard discount “made in Germany” can be seen from the sales increases at the Schwarz Group and Aldi Group (North and South) compared to the previous year of 6 percent and 6.4 percent. If Aldi continues to grow as strongly this year as it did in 2017 and Carrefour revenues continue to decline slightly, the discounter will be ranked number two in Europe next year.
The ranking is hardly showing any significant shifts compared to previous years. By now, however, all brick-and-mortar retailers would have to pay attention when they see Amazon’s unstoppable growth. Last year alone, the US online retailer, which still generates almost all of its sales with nonfood items, has risen by another three ranks to 12th in the European ranking. Its dynamics are considerable. Not least, Amazon’s acquisition of Texan organic retail chain Whole Foods in August 2017 at a price of 13.7 billion dollars should worry all brick-and-mortar trading managers. Because of this, the Americans also operate six outlets in England and are present in Europe now for the first time in-store. Above all, they are gaining a huge amount of know-how, which they will exploit in future competition with grocery chains.
Moreover, it cannot be calming for stationary competitors that Amazon is obviously ready to invest large sums in food retailing. Meanwhile, the question is no longer whether, but only when the online challenger will strike with a significant purchase in European food trade, which could push Amazon into the top 10 of the European retailer ranking.
Source:1 Lebensmittelzeitung 16/2018
Photo: pixabay Creative Commons