Newsletter Q1 UK 2018

Newsletter Q1 2018

Steady uptrend in the turnover and sales area of Danish grocery shops …

114

2,500

112

2,450

110

2,400

108

2,350

106

2,300

104

2,250

102

2,200

100

2,150

98

2,100

08

09

10

11

12

13

14

15

16

17

Turnover, MDKK (left axis)

Sales area, sqm (right axis)

Note: Development in turnover figures and sales areas, grocery retail sector, 2008-2017 Source: Retail Institute Scandinavia

well as shop closures by e.g. Aldi and Coop have in fact failed to reduce competition in the market. Similarly, the decline in the number of shops has not resulted in any immediate increases in the turnover per sqm in existing shops. Demographic shifts affect market developments On the face of it, stagnating turnover and fewer shops seem to suggest that the grocery retail market has reached saturation point, but the

Despite slower growth, strong competition for market share and low margins, however,

supermarket chains like Rema 1000 have announced that they expect to keep opening new grocery shops at a rapid pace. Taking into account the already high per capita sales area in the Danish grocery retail sector by Western European standards, further expansion may put the sector at risk of overcapacity. The risk of overcapacity is further exacerbated by the fact that the market exit of the Kiwi chain, a general decline in the number of grocery shops as

… But steady decline in the number of shops and turnover per sqm

47,000

3,200

46,800

3,100

46,600

46,400

3,000

46,200

46,000

2,900

45,800

2,800

45,600

45,400

2,700

45,200

45,000

2,600

08

09

10

11

12

13

14

15

16

17

Turnover, DKK per sqm (left axis)

No. shops (right axis)

Note: Development in number of shops and turnover per sqm, Danish grocery shops Source: Retail Institute Scandinavia

15