The year 2020 was unusual for the mass consumer sector. The health crisis drove consumption levels to levels never seen before, since citizens, being forced to be at home most of the time, made purchases in the largest food stores. After years in which the growth of the sector was small but constant, of 1%, according to the data of the Kantar household panel mass consumption soared 12.7% in 2020, its value growing by 6.8% and its volume by 4.5%. In addition, although the frequency to go shopping decreased by 2.7%, the volume of the basket grew by 14.1%. This fact means that “each visit becomes more important for the distributor”, explained the head of Kantar’s Distribution, Florencio García.
Within the channels that are integrated into the sector, all have had notable growth and a special role depending on the time of year. Thus, the short assortment channel, where supermarket chains such as Mercadona, Carrefour, Dia, Lidl or Alcampo, grew 9.7%, being during the precovid period when it had the greatest weight, 37.6%. The regional ones, which include Bonpreu, Gadis, Consum or Ahorramás, among others, were the winners of the year. Specifically, they grew by 16.6%, obtaining in confinement their best data, 26.2% of the weight of purchases.
The online channel also increased in those months, which has had an annual growth of 62%, reaching a total 2.6%, and which in confinement came to represent 3.1% of purchases. For its part, the specialist channel -the butchers, greengrocers, fishmongers of the markets- recovered the positive path last year, growing by 13.2%, and that in de-escalation came to represent 20.4% of sales, although it has remained close to those percentages in subsequent months. Finally, the hypermarket format increased by 8.8%, growing by 15.4% during the Christmas period.
Another significant change of the year has been that Dia has been displaced from the top 3 of the Spanish distribution in 2020. Specifically, Lidl has had the honor of taking that position of honor from the Spanish chain. Already, during the de-escalation, Lidl managed to be in third place, but now it is the first time that happens with year-end data. The chain of German origin gained a 0.5% market share, reaching 6.1%, and is consolidating itself as an alternative in large distribution. Dia lost share and closed at 5.8%.
The key to Lidl’s success is its positioning based on price. In addition, it continues to expand throughout Spain with the opening of more stores, mainly in Madrid. Today, in particular, it has announced that it will build a new warehouse in Parla (Madrid) of 150,000 square meters for 85 million euros and that it plans to open a dozen stores this 2021 in the region. In addition, it is increasingly giving more weight to the manufacturer’s brand to the detriment of that of the distributor and, according to Florencio García, “it is capitalizing on trends, such as eco meats or beauty products.”
This aggressive positioning of Lidl, and also of Aldi, although to a lesser extent, is hurting Dia. The Spanish chain is in a process of change in its commercial strategy, with store closings, a new assortment and adaptations to the online channel. During the confinement it increased its sales due to the large network of stores it has, is the company with the most establishments, and during the fourth quarter it returned to growing fresh. However, for Florencio García, “for it to grow we will have to wait until it stops selling stores.”
The leading chain in the sector continues to be Mercadona, which has a 24.5% market share. However, it has yielded 1.1% in 2020. During the confinement, for the Valencian company it was a handicap that its establishments were not local, so consumers have had the opportunity to try other supermarkets (Lidl, Día, regional …). Even so, this flight from customers did not affect their loyalty, which is still very high, but it did affect the loss of value in fresh products. «Mercadona had gained more than one point in fresh products these years and in 2020 lost a 1.2. The fresco was the engine of its growth ”, has influenced García. So the loss of fresh quota has been one of the reasons for their loss of quota.
The second reason has been the loss of customers in the online channel. During the toughest phase of the pandemic, Mercadona had to restrict your online orders, a fact that was taken advantage of by other distributors. For example, El Corte Inglés has been the one who has taken the most advantage of mass consumption sales over the Internet.
Because the online channel has broken barriers during the pandemic. Its share growth, up to 2.6%, is historic. But it is also relevant that it is a channel that is used more and more frequently and that more and more older people use it. Also, as ABC already reported, in this channel last year Amazon played a very important role, which represents 5.8% of online sales. “From now on Amazon will be referred to as a prominent agent,” commented the head of Distirbución de Kantar. Hence, the multinational recently launched Amazon Fresh in our country.
Prices in 2021
Looking ahead to this year, Kantar foresees that little by little there will be a price war. They warn that there are some chains, such as Lidl, Carrefour, Dia and Aldi, that are already running some promotions, but not in a general way. Mercadona has even lowered the price of some of its star products. «There is going to be a price battle to position itself with the consumer. But it would be a mistake for the distributors to do the same, because it would destroy value, “said Florencio García, who explains that it would be a mistake to do as in 2008, where” everyone wanted to be Mercadona. ” Appeal to differentiation and have other means of communication, such as “touching the heart” of customers.