Rising star B&M 'set to challenge Tesco'

UK discount retailer B&M is among a handful of retailers across Europe that could be challenging the likes of Tesco and Carrefour within 10 to 15 years.

Many Rising Stars, including B&M, are privately or family-owned

That is the conclusion of consultancy Kantar Retail, which has identified what it calls 15 Rising Stars of Retail across the continent.

Rising Stars, says Kantar, understand their strengths and how to exploit them successfully to attract today's more agile shopper.

The consultancy also says "it speaks volumes" that many Rising Stars have shunned multi-channel and operate purely through stores.

The up-and-coming challengers in Europe, in no particular order, are: B&M (UK), Aldi (Germany), Ocado (UK), Waitrose (UK), Amazon (USA), Biedronka (Poland), BIM (Turkey), Booker (UK), Colruyt (Belgium), DM (Germany), Eurospin (Italy), Jumbo (Netherlands), Leclerc (France), Lidl (Germany) and Mercadona (Spain).

According to Kantar Retail the Rising Stars tend to share one or more particular characteristics. These include proximity - shoppers increasingly value shopping in stores closer to where they live or work; smaller store formats; efficiency - the likes of Aldi are 'brutally efficient' throughout the value chain, Kantar says; strong private labels; and differentiation - new successful stores physically look different to other stores.

Many of the Rising Stars are also privately, employee- or family-owned businesses. This means they are not under pressure for immediate results from shareholders and can concentrate on medium and long-term strategies, Kantar points out.

This is borne out by B&M - which trades as B&M Bargains and B&M Homestore - which is owned by brothers Simon, Bobby and Robin Arora and who have transformed the fortunes of the chain since buying it in 2005.

Kantar says value is also a key driver in the success of the up-and-coming retailers, but that this does not necessarily mean 'cheap'. Waitrose products are more expensive than others but they are popular as there is a strong quality component that delivers real value. Similarly, discount stores such as Lidl have shown that they understand the importance of quality in perceived value, Kantar says.

Bryan Roberts, Kantar Retail's director of retail insights, commented: "To stay out in front, many retailers will need to spread their offer across different channels. For the majority, multi-channel retailing and offering different touch points to the shopper will the future.

"That said, the fact that many Rising Stars operate purely through stores speaks volumes - retailing needn't be multi-channel, it sometimes just needs to be differentiated, efficient and value-driven."

Source: DIYWEEK.net – essential reading for the DIY trade