76% of grocery shoppers prefer discounts over other rewards, showing a strong bias towards value as a result of the cost-of-living crisis. However, 45% of grocery shoppers show interest in loyalty rewards that extend beyond grocery discounts, peaking at 71% of younger families.
Higher living costs have pushed consumers to prioritise essential purchases and seek budget-friendly options, leading to growth in the popularity of discounters. Easing inflation and rising confidence will encourage shoppers to trade up, but many households will maintain cautious shopping behaviours.
Moving forward, grocery retailers will be challenged to balance affordability and quality amidst rising consumer confidence. The highly competitive market environment creates intense price-sensitivity, and the need to adapt to changing preferences will drive retailers to improve their store experience and offer more than just price.
The greatest opportunities lie in premium own-label products, as 74% of grocery shoppers believe they match the quality of branded products. Demographics such as older and wealthier households with premium options can be targetted while enhancing the shopping experience with better navigation and in-store technology.
This report looks at the following areas:
- Market performance, consumer confidence and the effects of the rising cost of living
- Who is shopping at grocery retailers and how frequently they shop
- Channels and retailers used by German grocery shoppers
- Understanding and establishing customer satisfaction with the leading grocery retailers
- Grocery shopping behaviours, including the potential for own-labels and stronger loyalty rewards
- Innovations by leading retailers both online and in-store, including the use of new technology, sustainable initiatives and providing a multichannel experience
Despite rising consumer confidence, German grocery shoppers remain cautious, seeking value even when trading up – driving demand for own-labels, tailored promotions and greater in-store convenience.
Armando Falcao, Associate Director – Retail Reports
Market Definitions
For the purposes of this Report, Mintel has used the following definitions:
This Report covers all retail channels that provide grocery products, following the retailer categories proposed by the German Retail Association (HDE). These include traditional supermarkets, food discounters, hypermarkets, online grocery retailers, as well as food and drink specialist stores.
Groceries are defined as products such as food, beverages, household goods (eg cleaning products, toilet paper, garbage bags), and/or personal care products. The primary focus of the research is on food and beverages.
This Report is complemented by Mintel’s Germany Online Grocery Retailing Market Report, which focuses entirely on and provides a deeper dive into the online channel for the purchase of grocery products.
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EXECUTIVE SUMMARY
- Key issues covered in this Report
- Overview
- The five-year outlook for grocery retailing
- Market context
- Lower inflation and rising confidence stimulate spending
- Graph 1: harmonised consumer price index, by category, 2022-24
- Germans are spending more due to the higher cost of living
- Graph 2: household private consumption expenditure (incl VAT), 2016-24
- Despite fierce competition, supermarkets are sustaining their share of groceries
- Graph 3: breakdown of grocery retailing, by retailer category, 2019-24
- Mintel predicts
- Market size & forecast
- Grocery retail will grow as Germans trade up on essentials
- Opportunities
- Attract shoppers willing to trade up with exciting premium own-labels
- Blend innovation with familiarity to drive loyalty
- Improve the store atmosphere to encourage younger shoppers to linger
- Leverage in-store technology to attract younger men looking for convenience
- The competitive landscape
- Edeka and Lidl share one third of the grocery retail market
- Graph 4: leading players’ estimated share of grocery retailing, 2024
- Discounters have increased their share of total German retail
- Graph 5: breakdown of total retail sales by retailer category, 2015-24
- Supermarkets and discounters compete fiercely
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MARKET DRIVERS
- Inflation and consumer confidence
- Easing inflation will improve consumer willingness to spend
- Graph 6: harmonised consumer price index, by category, 2022-24
- Lower inflation is leading to improved consumer confidence
- Graph 7: financial confidence over the next year, 2023 vs 2024
- Graph 8: changes in financial situation vs previous year, 2023 vs 2024
- Balance quality and affordability as consumer confidence rises
- Localism
- Localism continues to drive German grocery retail
- BMEL promotes innovative projects to strengthen regionality in German food
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MARKET ACTIVITY
- Sector size and forecast
- High inflation for food & drinks drives grocery retail growth
- Graph 9: total grocery retail sales (excl VAT), 2015-24
- Providing value amidst rising prices
- Grocery retail sales will continue to grow in the coming years
- Adapt to changing consumer needs as the economy improves
- Market segmentation
- Despite fierce competition, supermarkets are holding their ground
- Graph 10: breakdown of grocery retail sales, by retailer category, 2015-24
- Groceries outperformed non-food retail as consumers focused on essentials
- Supermarkets and discounters have grown further, while online food stagnated
- Consumer spending
- Consumer spending on food & drinks increased in 2024
- Graph 11: consumer spending on food and drinks (incl VAT), 2015-24
- Emphasise value through cost-saving strategies while confidence rises
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WHAT CONSUMERS WANT AND WHY
- Household grocery shopping
- Responsibility for grocery shopping has shifted in recent years
- Graph 12: responsibility over grocery shopping, 2021-24
- Traditional gender roles prevail in grocery shopping
- Women took greater responsibility for grocery shopping in 2024
- Graph 13: responsibility over grocery shopping, by gender, 2023
- Graph 14: responsibility over grocery shopping, by gender, 2024
- Entice men to browse and buy non-food products
- Older buyers visit grocers more often as part of their social routine
- Graph 15: household grocery shopping patterns, by generation, 2024
- Retailers used for grocery shopping
- The leading grocers increased popularity in 2024
- Graph 16: grocery retailers shopped at in a typical month, 2022-24
- Entice shoppers willing to cautiously trade up with exciting premium ranges
- Netto skews towards older, lower-income shoppers
- Graph 17: leading grocery retailers’ positioning by shoppers’ average age and household income, 2024
- Nearly three quarters of shoppers spend the most at the leading five grocers
- Graph 18: grocery retailers that shoppers spent the most with, 2024
- Discounters are favoured for top-up shops
- Graph 19: grocery retailers also shopped at in a typical month, 2024
- Diversify product ranges and reward loyalty
- Bargain-hunting shapes Germany’s grocery market…
- Graph 20: repertoire of grocery retailers used, by generation, 2024
- …challenging grocers to offer more than price to retain them
- Discounters lead in popularity, but supermarkets are gaining ground
- Graph 21: retailers on which consumers spend the most money on a month, by retail format , 2020-24
- Brand perception of the leading grocery retailers
- Germans perceive discounters to offer the best value for money, but a limited range keeps them coming back to supermarkets
- Edeka: a strong reputation for fresh produce but can improve cleanliness and store navigation
- Rewe is the most popular supermarket, and can leverage its perception for quality
- Supermarkets are considered expensive, while discounters must fight the perception of a limited range
- Graph 22: attributes of the leading grocery retailers, 2024
- Lidl offers great value-for-money but can improve variety and the omnichannel shopping experience
- Aldi can leverage in-store technology and one-stop-shopping to boost its popularity
- Kaufland can leverage its spacious stores with better signage and ease of navigation
- Own-label products
- Grocery shoppers increased purchase of own-label products in 2024
- Graph 23: consumption of own-label and branded food & drinks products compared to the previous year, 2024
- Leverage demand for affordable and value own-labels amidst rising confidence
- Own-label food and drinks have full penetration
- Unlock the potential for premium own labels among cost-conscious older shoppers
- Graph 24: consumption of own-label and branded food & drinks products, by generation, 2024
- Facilitate trading up into premium own labels for older shoppers
- Higher-earners drive demand for premium own-labels
- Graph 25: consumption of own-label and branded food & drinks products, by net household income, 2024
- Target younger families and wealthier households with exciting premium own labels
- Consumer behaviours when shopping for groceries
- 74% of Germans think premium own labels have comparable quality to branded food & drinks
- Graph 26: consumer behaviours when shopping for groceries, 2024
- Appeal to older shoppers with more inviting grocery store environments
- Strong loyalty rewards are crucial in grocery retail
- Leverage consumer interest in more-diversified loyalty rewards
- Target families with rewards that appeal to their need for flexibility and value
- Encourage younger shoppers to linger by improving the store atmosphere
- Encourage wealthier shoppers to trade up
- Entice higher spenders with a more personalised shopping experience
- Graph 27: shoppers who agree, by monthly spend on groceries, 2024
- Attract younger men by enhancing convenience through in-store technology
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RETAILER ACTIVITY
- Leading retailers
- Leading grocery retailers
- Edeka is preparing bold initiatives, but basic elements also show improvement potential
- Rewe leads in omnichannel innovation and AI-driven experiences
- Kaufland focuses on digitalisation, ecommerce and non-food
- Aldi leads in digital integration, discounts and price
- Lidl is dedicated to improving sustainability and the omnichannel experience
- Market share
- Competition in German grocery retail remains fierce
- Leading grocery retailers’ market share
- Retail innovation
- Generative AI will continue to transform the retail landscape
- Grocery retailers are trialling new technologies in store
- Rewe ToGo stores boast easy navigation, convenience and freshness
- Kaufland’s focus on non-food is confirmed with new own-label fashion collection
- Reinventing the grocery experience in-store with ‘transformer counters’
- Trialling AI-powered digital trolleys to support in-store grocery shopping
- Aldi combines tradition and innovation in the ‘cheapest Christmas markets’ in Germany
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APPENDIX
- Appendix – market definition, abbreviations and consumer research methodology and language usage
- Market definition
- Abbreviations
- Generations
- Consumer research methodology
- A note on language
- Appendix – correspondence analysis
- Correspondence analysis – methodology
- Correspondence analysis: characteristics associated with grocery retailers
- Appendix – market size and forecast
- Forecast methodology
- Forecast methodology – fan chart
- Market size – value – grocery retailing
- Market size – value – supermarkets
- Market forecast and prediction intervals – value – grocery retailing
- Market forecast and prediction intervals – value – supermarkets
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