Discount Variety Retail Chain Action has been on a high expansion course for some time. With 15.3 million customers per week, Action is currently enjoying great success as a discounter in the non-food sector. The company from the Netherlands has a range consisting of 6,000 products from the areas of cleaning, household, garden as well as stationery and multimedia.
In 2023, Action generated a new record turnover of around 11.3 billion euros in Europe. Now discounter LIDL is taking a drastic approach in its latest advertisement, in which current non-food items are compared directly in the flyer with those of Action. In the current handout, LIDL presents a detailed product and price comparison to highlight the advantages of his DIY own brand Parkside, among others, over the items from Action.
The focus is on better or more extensive features of LIDL's own-brand products, which are offered at the same prices as Action's items. An example is Parkside's white varnish, which can be used for 8 applications at the same price as Action, but for 8 applications at LIDL, compared to Action with 5 applications.
In addition to LIDL, other non-food retailers such as Kodi or Tedi have also come under pressure. The Dutch retailer continues to expand strongly and now operates over 530 stores in Germany, almost 50 more than in the previous year. What distinguishes Action, in addition to a wide assortment, is also the high value for money. The company currently offers around 1,500 items for less than 1 euro. More than two-thirds of all products cost less than 2 euros. LIDL knows exactly about the strong competitor from the neighboring country. Especially in the two foreign markets of France and the Netherlands, Action is represented almost everywhere. The company started in 1993 in Enkhuizen, the Netherlands, moved to Belgium in 2005 and to Germany in 2009. The company is 80 percent owned by the British private equity company 3i. In takeovers, the investment company from the island invests primarily in majority shareholdings in companies with a value of between 100 and 500 million euros. The most recent newly opened branch was recently in LIDL's home region in Heilbronn.
The threat to the large discounters such as Aldi and LIDL is not only becoming greater through action. Other non-food specialists such as Woolworth or Pepco also continue to grow through their pricing policy. Pepco reported a 4.3% decline in adjusted revenue in the third quarter just a few days ago but maintained its full-year 2024 earnings guidance. Since the beginning of the current year, Pepco has been 70 percent owned by Steinhoff International Holdings. Behind this is an internationally operating furniture group that has its roots in Lower Saxony. Steinhoff is active in many areas of retail.
Woolworth can also boast positive figures. In 2023, the group was able to expand its branch network to over 650 locations, including the first branches in Poland and Austria.
Woolworth has also made a name for itself in the non-food segment and carries a wide range of articles for everyday needs. These include, for example, home textiles, household items, fashion for women, men and children, decorative and drugstore items, stationery and haberdashery as well as a selection of gift items. In the 2021/2022 financial year, the company achieved sales of 641 million euros and a profit after tax of 25.8 million euros. The current figures make it clear that this is not only a challenge for the Schwarz subsidiary LIDL, but a turning point in the entire market. The food discounters are in danger of losing touch in a business area that has been profitable for them so far.
It remains to be seen whether LIDL's new advertising campaign will be successful, but it also shows that the challenge of the other providers, at least LIDL, is being taken more than seriously.
Read more: LIDL hat nun den Nonfood-Discounter Action im Visier! - Supermarkt Inside (supermarkt-inside.de)
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