Limited assortment retailers increasing share

Recent research from Kantar has highlighted that retailers with narrow assortments have increased their market share by 3%.

Lidl, Mercadona and Aldi are the main players to have benefited.

Lidl optimizes to the full its buying power and international assortment. While the range is limited at any moment in time, it varies a lot in particular with in-and-out strategies focusing on innovative and indulgent items, mostly frozen. Traditional mainstream retailers with their static ranges are unable to compete with this. Lidl also uses cookware items at very low prices which run out in a few hours to generate shop traffic.

Mercadona has extended its mainstream offering into the Portuguese market and quite a number of skus appeal because they do not exist or have a much better value:price relationship as a consequence of Mercadona’s bargaining power in the Spanish market.

Aldi is catching up Lidl but focusing more on competitive dairy and organic foodstuffs imported from the German market, which ar3e quite competitive in Portugal. The shops are brand new with a modern and dynamic shopping environment.

They are fighting for the same target clientele on the neighbourhoods of medium-sized cities and often located quite close to one another.