Revenge of the Discounters / Dollar Stores

  • Originally Posted in September 2009

    I wanted to pass along a very interesting G&M article regarding the next steps for discounter retailers such as Dollarama, Bargain Shop and Giant Tiger. You can find it at the link below:

    http://tinyurl.com/pkqnfa

    It got me thinking how in previous lives we used to treat these retailers with little respect and only go knocking with an offer when volume was short and we needed to fill a gap.

    With the recent downturn, these retailers have truly become a legitimate channel and the IPO talk surrounding them makes it seem like they may spend some of their recession bounty on a big push to expand.

    Discount is still small and relatively undeveloped in Canada. I am in Europe at the moment and the big two German Hard Discounters who have taken Europe by storm (Lidl and Aldi) now have over 15,000 stores and are both in the Top 10 retailers in the world according to Deloitte.

    Many CPG suppliers here scorned these two customers until the past few years and as a result Lidl and Aldi developed a loyal following with low prices on Control Label brands.

    Now that Hard Discount has become a legitimate channel (with up to 22% market share in Germany), CPG suppliers are going “hat in hand” to Aldi and Lidl to get listings that they refused them even a few years ago. Imagine that you can often not find both Coke and Pepsi at Lidl (and sometimes neither) and people still flock there for the great prices on quality goods.

    If Discount is going to make a big push in Canada than CPG companies need to be ready with a product offer that matches the channel strategy. By the way, Aldi already has 1000 stores in the US market and is on an expansion drive.

    When will Hard Discount arrive in Canada?

    Does your company have a plan?

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