Hyper and supermarkets lose market share globally to Traditional & Online Channels

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Hypermarkets and supermarkets around the world are losing their share of the global grocery market to online challengers, according to research from Kantar Worldpanel. 2016 hypermarket and supermarket FMCG value sales grew by just 0.7%, while spend online grew by 26%; discounters by 5.1% and cash and carry by 4.1%. Kantar Worldpanel’s Winning Omnichannel, an annual report on FMCG trade channels, is revealing the shrinking market share of supermarkets and hypermarket across the globe.

  • Global hypermarket and supermarket market share shrinks as e-commerce, discounters and traditional formats prosper
  • By 2021 hypermarkets and supermarkets will account for less than half of total trade
  • Supermarket and hypermarket growth especially slow in the UK, South Korea and Peru

Table 1: 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%

The share of hypermarkets and supermarkets is predicted to reduce further, to just 48% of global FMCG spend by 2021, with e-commerce set to grow to 7.5% and discounters 6.5%.

Chart 1: Global FMCG value share per channel by year (Click on the image to zoom)

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Global FMCG value share per channel by year.
E-commerce

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, 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.

Table 2: Value share of e-commerce across each market and percentage growth of FMCG spend through e-commerce, per market. (Value share is the percentage of e-commerce FMCG purchases versus total FMCG purchases across all channels.)

E-commerce fastest growing markets Value Share 2016 Growth 2016/2015
Mainland China 5.7% 53%
South Korea 19.7% 41%
Taiwan 5.7% 36%
Spain 1.7% 29%
Portugal 1.0% 24%

 

Ecommerce slowest growing markets Value Share 2016 Growth 2016/2015
France 5.5% 8%
UK 7.3% 8%
Argentina 0.8% 7%
Japan 7.4% 5%
US 1.5% 5%
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Discounters

Discounters are 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 in 2016.

Table 3: Value share of discounters across each market and percentage growth of FMCG spend through discounters, per market. (Value share is the percentage of discounter FMCG purchases versus total FMCG purchases across all channels.)

Discounters – fastest growing markets Value Share 2016 Growth 2016/2015
Colombia 7.0% 124%
Argentina 8.6% 32%
Brazil 1.6% 13%
UK 9.2% 11%
Ecuador 12.5% 7%
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Discounters – Slowest growing markets Value Share 2016 Growth 2016/2015
Japan 5.3% 3%
Spain 16.2% 1%
Chile 12.5% -2%
Portugal 14.4% -4%
France 11.0% -5%
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Hypermarkets and supermarkets

This channel is still growing but at a sluggish pace of 0.7%. It has seen some success in some developing regions of Latin America however it is struggling against discounters in the UK and Spain, Peru, where traditional trade dominates, and in South Korea where e-commerce is fast becoming the dominant channel.

Table 4: Value share of hypermarkets and supermarkets across each market and percentage growth in FMCG spend through hypermarkets and supermarkets, per market. (Value share is the percentage of hypermarket and supermarket FMCG purchases versus total FMCG purchases across all channels.)

Hypermarkets and supermarkets – fastest growing markets Value Share 2016 Growth 2016/2015
Argentina 30.1% 25%
Central America 16.3% 20%
Brazil 53.7% 16%
Indonesia 7.9% 11%
Mexico 18.8% 10%

 

Hypermarkets and Supermarkets – slowest growing markets Value Share 2016  Growth 2016/2015
 Malaysia  70.2%  -1%
 Spain  66.5%  -1%
 UK  62.7%  -3%
 Peru  15.8%  -5%
 South Korea  55.1%  -7%
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Traditional trade

In developing regions where modern trade would be the next practical step, traditional and other formats (comprising door-to-door, cash and carry and pharmacies) are still performing well. In Africa, for example, where price and connectivity are key factors, traditional trade accounts for an average of 69.4% value share).

FMCG spend through this channel is growing faster than total FMCG in 50% of regions across the globe.

Table 5: Value share of traditional trade across each market and percentage growth of FMCG spend through traditional trade per market. (Value share is the percentage of traditional trade FMCG purchases versus total FMCG purchases across all channels.)

Traditional trade – fastest growing markets Value share 2016 Growth 2016/2015
Argentina 40.8% 27%
Brazil 24.8% 15%
Ghana 99.7% 8%
Taiwan 56.3% 6%
Vietnam 78.5% 5%

 

Traditional trade – slowest growing markets Value share 2016 Growth 2016/2015
Mexico 37.9% 0%
Spain 10.8% -1%
Thailand 52.2% -1%
Portugal 2.5% -1%
Saudi Arabia 36.9% -5%

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.”

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Hyper and supermarkets lose market share globally to Traditional & Online Channels - Brand SpurHyper and supermarkets lose market share globally to Traditional & Online Channels - Brand Spur

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Hyper and supermarkets lose market share globally to Traditional & Online Channels - Brand SpurHyper and supermarkets lose market share globally to Traditional & Online Channels - Brand Spur

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