The Rise of Hard Discounters and Its Impact on Dutch Supermarkets

mamta Devi
Jun 9
6 min read

Walk into any Dutch supermarket today, and you’ll sense a quiet revolution underway. Shoppers are making faster choices, opting for cheaper alternatives, and passing by once-loyal brands. The reason? The rapid ascent of hard discounters like Lidl and Aldi — lean, price-focused retailers that are rewriting the rules of grocery shopping in the Netherlands. As inflation bites and wallets tighten, Dutch consumers are voting with their feet, gravitating toward value-driven stores that promise simplicity without sacrificing quality. But this rise isn’t just about cost—it’s reshaping the entire supermarket landscape, forcing traditional players to rethink their game. So what does this mean for the future of Dutch grocery retail? Let’s unpack the shift.

Market Dynamics: Hard Discounters Gaining Ground

In 2024, hard discounters emerged as the strongest performers in the Dutch grocery market. Lidl, for instance, experienced a notable increase in market share during the second and third quarters of the year, stabilizing in the fourth quarter. Compared to the previous year, Lidl ended 2024 with a year-on-year profit in the fourth quarter of almost 1 percentage point. (Source: ESM Magazine, Hiiper)

Aldi also reversed its declining trend, with its market share rising from 5.15% in 2023 to 5.33% in 2024. (Source: discount-retail)

Consumer Behavior: Shifting Preferences

Figure 1: Grocery Shopping at Hard Discounters

European consumers are increasingly turning to hard discounters for their grocery needs. A study revealed that 38% of European consumers reported doing more of their grocery shopping at hard discounters compared to the same period the previous year. The primary motivations include inflation (47%), convenience (39%), and product range (27%). (Source: ROAMLER)

However, while consumers appreciate the affordability, many miss the comprehensive product offerings of traditional supermarkets. A significant number (59%) expressed a desire for a more extensive product range, highlighting the trade-off between price and variety.

Impact on Traditional Supermarkets

The rise of hard discounters has put pressure on traditional supermarkets. Jumbo, for example, experienced a decline in loyal customers and a decrease in average spending per customer. In contrast, Albert Heijn managed to increase its market share from 36.7% to 37.1%, partly due to strategic acquisitions and an expanded store network. (Source: Scribd, Hiiper, Retail Detail)

Dirk, another discount-oriented chain, also saw growth in its primary customer base, indicating a broader consumer shift towards value-driven shopping. (Source: Hiiper)

The Battle for Urban Convenience

Figure 2: Urban Retail Strategies in the Netherlands

In the densely populated cities of the Netherlands, the fight for shopper attention is being won by those who can offer convenience, speed, and value. Hard discounters have become increasingly adept at tailoring their store formats and assortments to thrive in these high-density, urban environments.

Discounters Thrive in Compact Urban Spaces: Retailers like Lidl and Aldi have optimized their operations for smaller, high-turnover store formats that fit easily into crowded city blocks. With limited but essential assortments, quick checkout processes, and lower reliance on in-store staffing, these stores cater perfectly to busy urban shoppers making frequent, smaller purchases.
Traditional Supermarkets Adapt with AH to Go and More: To counter this trend, traditional chains are rethinking their presence in cities. Albert Heijn’s “AH to Go” concept — found in train stations, universities, and near office complexes — is a direct response to the discounter threat. These stores focus on grab-and-go meals, snacks, and essentials, targeting commuters and urban dwellers who prioritize speed and accessibility.
Urban Planning and Shopper Habits Are Changing the Game: The urban shift is also influenced by structural factors. With reduced parking availability, environmental policies discouraging car usage, and a growing number of single-person households, the average basket size is shrinking. This change favors smaller-format stores that are walkable or bike-accessible, further boosting the relevance of hard discounters in city centers.

Impact on Suppliers and Brands

The rise of hard discounters is not just reshaping consumer behavior — it’s fundamentally altering the relationship between supermarkets, suppliers, and brands across the Dutch grocery ecosystem.

Figure 3: Impact of Discounters

Stronger Negotiating Power for Discounters: Discounters operate on a consolidated, high-volume model that gives them significant leverage over suppliers. With fewer SKUs and centralized procurement, they can negotiate lower prices, demand tighter margins, and impose strict logistical requirements. This power imbalance forces suppliers to accept less favorable terms or risk losing a large chunk of volume.
Pressure on Brands to Go Private: Many major CPG brands are now under pressure to manufacture private label products for discounters, often under generic or exclusive retailer brands. While this offers some compensation in terms of volume, it dilutes brand equity and increases dependence on a small number of powerful retailers.
Assortment Rationalization and SKU Reduction: To keep prices low and operations efficient, discounters typically carry 1,000–2,000 SKUs — a fraction of what traditional supermarkets stock. This has led to industry-wide pressure for SKU rationalization, with less shelf space for niche, regional, or premium products. Suppliers are increasingly pushed to demonstrate high rotation, cost efficiency, and brand differentiation to avoid being delisted.

Strategic Responses: Adapting to the New Landscape

As hard discounters continue to erode the market share of traditional supermarkets in the Netherlands, legacy retailers are under pressure to respond swiftly and strategically. This new competitive landscape is forcing major players like Albert Heijn, Jumbo, and Plus to reinvent themselves — not just to retain their customer base, but to stay relevant in a value-driven era.

Figure 4: Strategic Responses of Dutch Supermarkets

Aggressive Price Positioning: Albert Heijn, often perceived as one of the more premium-priced retailers, has made bold moves to shed its "expensive" image. In 2024, it slashed prices on over 1,000 products, aiming to compete directly with discount retailers. This pricing strategy was not only a response to inflationary pressure but also a calculated move to capture more value-conscious shoppers. (Source: Retail Detail)
Store Expansion and Acquisitions: Albert Heijn further solidified its dominance through strategic acquisitions, including the takeover of several Jan Linders locations. This move helped the brand expand its physical footprint, especially in southern regions of the Netherlands where it had lower penetration. As a result, Albert Heijn increased its market share from 36.8% in 2023 to 37.7% in 2024. (Source: FreshPlaza)
Private Label Investment: To better compete with discounters’ highly popular private label offerings, traditional retailers are expanding and improving their own-brand product lines. Jumbo and Plus have invested heavily in enhancing the quality, range, and packaging of their private label goods — offering them at competitive prices while maintaining brand loyalty.
Digital and Omnichannel Integration: With the rise of e-commerce and changing shopper behavior, Dutch supermarkets are doubling down on digital transformation. Albert Heijn, for instance, has integrated AI-driven recommendations into its app and offers seamless online-to-store experiences through its AH.nl platform and home delivery services. Jumbo is also testing new digital store formats and click-and-collect hubs to cater to time-strapped customers.
Sustainability and Differentiation: While discounters thrive on simplicity and low cost, full-service supermarkets are differentiating themselves through sustainability initiatives and premium experiences. This includes sourcing local products, reducing plastic use, and offering organic and plant-based alternatives. By aligning with growing consumer demand for ethical and health-conscious choices, these retailers aim to retain a segment of customers less motivated purely by price.
Loyalty Programs and Personalized Offers: To build customer stickiness, supermarkets are enhancing loyalty programs. Albert Heijn’s revamped Bonus Box and Jumbo’s loyalty app use customer data to offer hyper-personalized discounts — a feature that hard discounters typically lack. These programs incentivize repeat visits and increase basket size.

Future Outlook: What Lies Ahead

The Dutch grocery landscape is heading toward a more polarized future — with value-driven discounters on one end and experience-focused, digitally enabled supermarkets on the other. Hard discounters like Lidl and Aldi will likely continue expanding their urban presence, investing in private labels and supply chain efficiency. Meanwhile, traditional players will need to double down on digital innovation, personalized engagement, and sustainable practices to stay relevant. As inflation normalizes, the battle may shift from pure price to value perception — where trust, quality, and convenience define the next wave of winners.

Conclusion:

Traditional Dutch supermarkets are not standing still. In the face of the hard discounter surge, they are pivoting with sharper pricing, wider store networks, private label innovation, and customer-centric digital strategies. Success will hinge on their ability to balance affordability with a superior shopping experience — a blend that hard discounters still struggle to offer.

The Rise of Hard Discounters and Its Impact on Dutch Supermarkets

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