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

S Group’s Strategic Pricing Strategy Boosts Market Share in Declining Grocery Store Market

Last year, the grocery store market experienced a decline in sales volume for the second consecutive year. Despite this, S Group’s market share increased thanks to its price reduction strategy 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, while the group’s grocery sales grew by 8.9 percent, outpacing the overall market growth.

In contrast, K Group and Lidl experienced a decrease in their market share and growth in grocery sales of less than four percent each. K Group has been facing pressure on its market share due to accelerated inflation and declining consumer purchasing power. On the other hand, S-market was the primary driver of S Group’s growth last year, with sales increasing at a faster rate than the market average.

Overall, despite a decline in sales volume, the value of sales increased by six percent to 22.9 billion euros due to rapid inflation. Online grocery shopping experienced modest growth last year, reaching 626 million euros and accounting for less than three percent of grocery sales. The decline in sales volume can be attributed to several factors such as changing consumer preferences and competition from online retailers like Amazon and Alibaba.

S Group’s strategy of maintaining an affordable shopping basket by reducing prices proved successful as it attracted more customers who were looking for ways to save money on groceries. The group initiated price reductions in Xtra products early in the year and continued them throughout the year, which helped it gain a larger market share compared to other trade groups. Meanwhile, K Group focused on throw-in offers and low-cost own products while Lidl emphasized affordability and introduced a new loyalty program to retain customers.

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