Market Share Of Supermarkets Shrinking Across The Globe

7th July 2017

A new study by Kantar Worldpanel highlights the shrinking market share of supermarkets and hypermarkets across the globe, as e-commerce sites and discount stores prosper.

Winning Omnichannel, a report on FMCG trade channels, predicts that share of hypermarkets and supermarkets will reduce to just 48% of global FMCG spend by 2021 compared to 52% last year, with e-commerce set to grow to 7.5% and discounters to 6.5%.

Global FMCG value share and 2016 value growth, per channel

Channel	Global value share 2015	Global value share 2016	Percentage value increase (yoy)
E-commerce	3.8%	4.6%	26.0%
Discounters	5.5%	5.6%	5.1%
Convenience	4.6%	4.6%	4.1%
Cash and Carry	1.1%	1.4%	4.1%
Hypermarkets and supermarkets	53.2%	52.0%	0.7%
Traditional	26.1%	26.1%	3.2%
Door to door	0.8%	0.8%	0.7%
Drugstore and pharma	0.6%	0.6%	0.9%

As widely reported, the share of grocery shopping conducted online continues to rise, particularly in the world’s most advanced e-commerce markets, such as South Korea, China and the UK. In the UK, Kantar Worldpanel’s data shows that online sales grew from 6.7% to 7.3% value share in the last year alone. British shoppers are second only to South Koreans in the proportion of groceries they buy online, although the report suggested the market was slowing. Up 8% last year, UK’s e-commerce growth rate was the slowest of the countries surveyed alongside France at 8%.

Meanwhile, discounters were the second-fastest growing channel in 2016 with 5.1% value growth. Discounters saw the highest value growth in Colombia – 124% – where over 600 stores were opened last year.  The UK was the country with the fourth highest growth in value share, up 11% to 9.2%.

With regards hypermarkets and supermarkets, Kantar Worldpanel’s research shows sluggish growth of these formats with their only real success being seen in some regions of Latin America such as Argentina and Brazil.  However, they are struggling against the discounters, particularly in the UK (-3%) and Spain (-1%), and in South Korea where e-commerce is fast becoming the dominant channel.

Commenting on the report’s findings, Stéphane Roger, global shopper and retail director, Kantar Worldpanel, said: “Channels which traditionally dominated the field – supermarkets, hypermarkets, drugstores – are in steady decline worldwide. Step forward the ‘new order’: e-commerce and discounters, cannibalising the big retailers with their promise of convenience and lower prices.

“Technology is fast changing the way people shop and, with e-commerce and discounters set to continue their march at the expense of large format retailers, there is an urgent need for retail reconfiguration across the world.”

NAM Implications:

• Key issue is supermarket shares are not going back to the ‘good old days’.
• Best factor that inevitability into trading strategies.