Consumers’ strong perception that discounters offer fair pricing is clearly a significant factor in their overall success. In tough economic times, where fair pricing is a key driver of Brand Choice in the FMCG sector overall, the success of this retail strategy and associated perceptions is unsurprising. However, when financial pressures ease, these brands’ weaknesses in other key drivers (such as differentiation) is likely to impact their efforts to drive continued growth.
The relative lack of trust consumers have in discounters — as well as weak ‘Experience’ scores — may hamper their ability to retain their position over the longer term as the economy returns to growth. With mid-priced competitors offering similar ease of access, discounters could lose customers as pressures on consumers lessen — especially as they struggle to differentiate and offer something unique to these customers in exchange for their loyalty.
While their Accessibility is a strength, it offers diminishing returns if discounters try to mitigate their impending loss of revenue by expanding the retail network.
To succeed, discounters could aim to boost consumers’ perceptions of the quality of their experiences and the uniqueness of their offerings. These are both critical to building trust with consumers and inspiring loyalty that would make them the preferred choice during times of both pressure and prosperity. For a deeper look into our FMCG retailer evaluation for Germany, or to explore similar findings in other markets, read more in our latest FMCG shopper trends report.