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The Happy, Tough And The Smart In War Of Discount Supermarkets In Spain

The type of discount supermarket, based on offering low prices, is on the rise in Spain and is the one used by new operators to gain a foothold in an increasingly competitive distribution sector, although with a diversified model in three categories: the happy, the tough and the smart. Dia, Aldi and Lidl have to compete with new venues that seek to differentiate themselves and opt for different strategies.

Despite the fact that the food distribution sector in Spain is highly consolidated, with Mercadona as a prominent leader, with a weight of regional chains unparalleled in the rest of Europe and with large multinationals with a global reputation, there are still spaces that some of you already teach are taking advantage.

The growth of Primaprix, the expansion plans of Sqrups, the emergence of the Russian company Mere, the success of Family Cash or Carrefour’s commitment to Supeco are just some examples of the turmoil in an already tremendously competitive sector.

Iñaki Espinosa (Sqrups): “We are the only ‘saldistas’, 100% of what we sell has the best-before date about to expire, or is discontinued or comes from remnants of promotional campaigns”

“When it seems that the entire board was distributed, suddenly we realize that new proposals are emerging that are filling new gaps. And we did not take them into account or intuit them,” acknowledges EFE the head of distribution in the Aecoc employer , Pablo de la Rica.

The ‘happy’: Primaprix, Dealz and Sqrups
In the segment of the happy model, happy discount, three brands compete with different strategies, but that share the same essence: the search for a bargain and opportunities among leading brands. “They are focused on price, but they give it a spin because what they propose is to surprise and entertain. Their stores invite you to enter and take a look, they always have new and original things,” explains De la Rica.

According to data collected by the Retail Data portal, in just five years Primaprix has multiplied its number of establishments by ten (up to 123), Dealz has quintupled it (56) and Sqrups has tripled it (49). “They have the potential to grow more, and in fact show a positive evolution in sales and they all seem to be committed to expanding,” confirms De la Rica.

Mere, the Russian discount supermarket chain.
Primaprix -with headquarters in Luxembourg- promises discounts of between 20 and 30% on all its products; Britain’s Dealz follows a similar strategy, although the “hook” is above all its references to 1.50 euros; while the Spanish company Sqrups focuses only on those “liquidation” foods and sells them at demolition prices.

“We are the only ‘saldistas’, 100% of what we sell has the best before date about to expire, or is discontinued or comes from remains of promotional campaigns. We do not have a permanent assortment, it is constantly changing”, explains the founder of Sqrups, Iñaki Espinosa.

His model has been reinforced by the coronavirus pandemic: “Before, mostly older people came, and now there are also young people who opt for responsible consumption because they know that we are the last opportunity to sell these products, if they do not end up being destroyed (…). Thus we have grown 25% in turnover “.

The ‘hard’: Mere, Family Cash and Supeco
When it seemed that stores with items placed in boxes and pallets – to reduce costs – seemed to have passed away, several chains are recovering the super discount format ( hard discount ) with relative success.

The last to try her luck is the Russian Mere , who has just opened in Spain with an extremely austere and spartan type of store , with the aim of reaching a hundred supermarkets in four years.

Family Cash also moves along the same lines, a chain of medium-sized hypermarkets that has about 25 stores and that is generating controversy within the sector due to its low prices; so far it has taken advantage of closures and divestitures of other of its rivals to accelerate its expansion.

Proof of the renewed interest shown by some consumers in this class of chains is the bet of a giant like Carrefour for Supeco, a brand that already has almost thirty establishments in Spain with low prices per flag and that has triumphed in Latin America .

The ‘smart’: Lidl and Aldi
Not so many years ago, the German companies Lidl and Aldi also opted for pallets, cardboard boxes, they hardly gave importance to fresh produce … But not anymore. In Spain they have made a 180 degree turn and the movement has gone well for them: both are gaining share and their competitors are scared. In fact, Lidl has already given DIA the surprise to become the third most important chain in the sector by market share (over 6%).

“They have a magnificent evolution. They have gone from ‘hard ‘ to ‘ smart discount ‘ by adding new layers of value to their positioning, which is still based on price but to which they add the shopping experience or their commitment to bio or sustainability “, De la Rica reasons.

Michael Taylorhttps://wideworldmag.co.uk
Michael Taylor is a journalist who intends to build a bright career in the media industry, He has a great interest and knowledge about the Business industry for WideWorldMag. Hence, He loves to cover the hottest news in the Sports niche. Michael also published his articles in New York Post, NPR and Sky Sports.

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