European retailers will go more local

Some of the biggest names in European grocery retail are looking to secure more localised products for their consumers over the next 10 years, in order to gain a competitive advantage. 

According to research conducted by Kurt Salmon Associates among grocers based in France, Germany and the UK, even though each market is mature, the competitive landscape and consumers behaviours are so different it will be difficult to export their products.

As a result, competition will increase domestically and the gap will broaden between the success of market leaders and the contraction of the independents’ and smaller retailers’ share.

“Successful grocery retailers understand their local consumers, identify a clearly defined product and have the operating model to execute these consistently well,” said Mathew Chuchen, senior manager at KSA.

“A grocer such as Lidl in Germany can succeed with a basic transactional offer that is focused on price; while for others such as Morrisons in the UK, where price is always an important factor, others factors such as the assortment or service can create differentiation,” he added.

According to KSA, grocers in UK are more advanced with customer insight and initiatives to develop customer experience, whereas in France and Germany, there is currently far less of a focus in this area.

Jane Parkinson, 28.09.2009