Newsletter Q1 UK 2018

Newsletter Q1 2018

HAS THE DANISH GROCERY RETAIL MARKET REACHED SATURATION POINT?

By Andreas Brandt, Senior Consultant, Sadolin & Albæk, Research & Valuation

Uptrending turnover figures and the presence of multiple players notwithstanding, the Danish grocery retail sector is starting to slow down. Shifts in consumer behaviour and fierce competition are putting the grocery retail market under strain, but property in- vestments in the sector may still prove lucrative – provided you know how to pick the right locations.

Over the past decade, the Danish grocery sector has expanded dramatically. In particular low-budget supermarkets like Netto, Rema 1000 and Lidl have flourished, as a shift in consumer behaviour towards higher cost awareness has contributed to turnover growth, facilitating large-scale expansion of the grocery shop network in the low-budget sector.

Although the expansion has taken place at the expense of e.g. small grocery shops and corner shops, the sector has seen a boom in aggregate turnover and total sales area. However, according to the latest data from Retail Institute Scandinavia, growth has slowed in recent years, with budding signs of market saturation in the grocery retail sector.

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