“Discount supermarkets are a very dominant feature in Denmark and prices play a significant part, because Danes like cheap groceries. Whereas consumers in say, France, the Netherlands and Canada have another approach to food stuffs and prices, which also means that there is more room for exclusive grocery shops,” the researcher from CBS points out and then adds:
“Furthermore, competition in Denmark is tough, because we have a lot of convenience stores. In fact, supermarkets cover one third more square metres in Denmark than in the average EU member country, in relation to inhabitants.”
Chain stores disappear
According to Mogens Bjerre, this picture may change. After a rise in the number of convenience stores in four consecutive years, Denmark has lost two chain stores during 2023. And the remaining stores are preparing for battle.
“Aldi and Irma have disappeared. For the last couple of years, Coop has had an annual deficit of 1-2 per cent. The industry is engaged in a tough battle and profits are not terribly high. Previous studies show that a 5-6 per cent drop in trade will leave the bottom line in the red,” says Mogens Bjerre and points to Salling Group with Netto, Føtex and Bilka as the exception, as they have just managed to keep their numbers in the black.
“Netto in particular has kept Salling in the black. And on top of that, Salling is a young player on the market, and they have a much more consistent shop structure. Coop is only just starting on that. They quite simply need fewer formats,” Mogens Bjerre explains.
Which points to Coop’s new strategy, where management is cutting some of their eight chain shops lose: Irma, Dagli’Brugsen, Superbrugsen, Kvickly and Fakta – while concentrating on three new concepts: Coop 365, Brugsen and COOP.
Make room for distinctiveness
According to the researcher from CBS, it is not only discount supermarket chains that should be analysing concepts and markets.
“In terms of the slightly more exclusive segment, it might be advantageous to consider the formation of voluntary supermarket chains, where members are given the freedom to develop their own profile according to local needs,” says Mogens Bjerre and then elaborates:
“Apparently, there is no market for a chain store as such, but nationally, we have room for 15-25 individual shops with individual product ranges.”
In other words, consumers should expect changes in the retail business. Only, they should not expect huge price drops.