Surviving the Decline: How S Group Kept Its Market Share and Increased Sales Despite Weakened Purchasing Power

The sole trading group, S, saw an increase in market share last year.

Last year, grocery stores experienced a significant decline in sales volume for the second consecutive year. Despite this, S Group managed to increase its market share and become the only trade group to grow, thanks to price reductions that resonated with consumers facing weakened purchasing power. According to Nielsen IQ’s grocery store register, S Group’s market share increased by 1.3 percentage points to 48.3 percent last year, and its grocery sales grew by 8.9 percent, outpacing the overall market growth of just 4 percent.

On the other hand, K Group’s market share decreased by 0.9 percentage points to 34.3 percent, while Lidl’s market share decreased by 0.2 percentage points to 9.6 percent last year. Both trade groups experienced growth in grocery sales of less than four percent due to various reasons such as accelerated inflation and declining consumer purchasing power.

Despite the decline in sales volume, the value of sales increased by six percent to €22.9 billion last year due to rapid inflation. S Group’s strategy of maintaining an affordable shopping basket by reducing prices proved successful as they initiated price reductions in Xtra products early in the year and continued them throughout the year. The K Group focused on throw-in offers and low-cost own products while Lidl emphasized affordability and introduced a new loyalty program.

In contrast with traditional grocery shopping, online grocery shopping experienced modest growth last year with €626 million euros worth of sales accounting for less than three percent of overall grocery sales. However, Nielsen IQ’s grocery store register provides a comprehensive overview of market trends since it has been produced in cooperation with trade groups and individual operators since 1978.

Overall, despite the decline in sales volume of traditional grocery stores, retailers are finding innovative ways to attract customers through price reductions and affordable products while also leveraging technology through online shopping platforms to expand their reach and customer base.

S Group’s dominance in the industry can be attributed not only to their effective pricing strategies but also their ability adapt quickly to changing consumer behavior patterns and technological advancements within the industry.

Lidl’s focus on affordability and introducing new loyalty programs shows their commitment towards retaining customers despite rising costs.

K Group could have done more than focusing solely on throw-in offers and low-cost own products if they had taken into account accelerated inflation earlier on like S group did when initiating price reductions throughout the year.

Online grocery shopping is still a relatively small part of overall groceries sale but it is growing rapidly which puts pressure on traditional retailers who need to keep up with technology advancements if they want

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