Branded suppliers will come under increasing pressure over the next decade as hard discounters continue to gain market share, a leading supplier has warned.

Speaking at the ECR Europe conference in Brussels, Procter & Gamble president western Europe, Paul Polman said: “Aldi is now one of the top brands recalled by German children,
ahead of Barbie and Disney. Hard discounters are outperforming every other format. They offer simple and transparent choice to budget-conscious consumers and they are implementing ECR better than we are today.

“Retailers and branded suppliers have not coped with this change. We took our eyes off the ball.”

Branded suppliers had to persuade consumers that it was worth paying extra for their products with more exciting npd, more innovative instore campaigns and more appealing promotions, said Polman.

“Consumers are becoming harder to reach and less responsive to traditional media, so the store environment is increasingly important.”

His comments came as M+M Planet Retail published a report revealing the discount format was the fastest growing format in food retail globally in 2003 with 27% growth. This compared to sales growth of 21% through supermarkets, 18% at c-stores and 16% at hypermarkets.

The Schwarz Group, which owns Lidl, grew sales by 36% in the last year, making it the fastest growing player of the top 30 global grocery retailers in 2003.

Rewe, Aldi, Tengelmann and Carrefour’s format Dia had also made significant progress.
Elaine Watson