The Rise of Low-Cost Brands: A Major Phenomenon in the Retail Industry According to Pixis Conseil Co-Founder, Noria Cung

What is the major event of this first half of 2023 for Pixis?

The strong comeback of the price, whatever the formats or brand proposals. Today, this is a major subject that is reconfiguring, in broad daylight, industrial/retailer/consumer relations.

Inflation effectively puts the price at the heart of the concerns. But is it a temporary phenomenon or a recurring subject?

Definitely a recurring topic! If, in mass distribution, Leclerc is one of the brands to have really positioned itself on price, the other players are regularly confronted with it with more or less success.

At the very beginning of the 1990s, we saw German hard-discounters set up in France. French retailers have also tried their hand at it with their own models, such as Leader Price for Casino or Netto for Intermarché. But after a period of growth that brought this segment to nearly 15% market share at the start of 2009, the trend has been strongly reversed. This forced the players to revise their models: for example, Lidl spent 8 years renovating its fleet.

What is the assessment of this sector today? Especially with the development of many players in the bazaar, home decoration?

Discounters, in the broad sense, are very successful. The latest barometers crown Action and Lidl among the favorite brands of the French. Today, the question of price no longer sacrifices quality, nor the idea of ​​“purchasing pleasure”.

With discounters, the question of price no longer sacrifices quality, nor the idea of ​​”purchasing pleasure”

Today, there are nearly 4,000 points of sale qualified as “giant bazaars” at bargain prices. We think of Action, Normal, Gifi, Noz, Foirfouille… Their turnover is estimated at 10 billion euros in 2022, or + 12% in one year!

The overall champion is the Dutch brand Action. Arrived in France only 12 years ago, it has 726 stores in 2022, with 76 openings in the same year!

So what are the winning assets of these low-cost brands?

They have perfectly integrated the current expectations of consumers: a valued customer experience that requires unstoppable price positioning, quality of the offer, regular new products and a local presence. They even afford the luxury of event collabs that unleash passions, like that of Djibril Cissé with Lidl! Add to that 360° communication and success is guaranteed.

Are these temples of “good bargains at low prices” not, however, in contradiction with the wishes of reasonable consumption?

Although today more and more French people are engaged in a form of responsible consumption, in the face of inflation, we are witnessing a change in purchasing behavior towards lower prices.

Even if these concerns are often contradictory, they are different messages that retailers must hear. And above all, knowing how to decipher them, to offer models in line with customer expectations.

Be that as it may, the world of “bargains at low prices” is on the rise… and encourages ever more consumption!