Winners and losers

The leading retailers and their order does not change much from year to year. Food retailers head the list, as one would expect – they are high volume, low margin businesses. Aldi (Nord and Sud) and Schwarz (Lidl and Kaufland) are in the top three because they take the low margin, high volume format to its logical extreme. Tesco has been slimming down its international businesses, but is unlikely to be overtaken by Aldi in 2020 even though it has pulled out of Poland.

However, the table does highlight one of the major changes happening in retailing at the moment – the growth in online. Amazon is the only non-food retailer in the top 10 (it has some food operations, but they are small) and it has been moving steadily up the list. Amazon usually says that about half of its sales volume is at full price and the rest is through marketplace sellers where Amazon takes a commission, which varies by the number of services these marketplace operators actually use. (Amazon, with a focus on the UK, is discussed in Mintel’s report Amazon: Creating an ecosystem-UK, January 2020. That report is being repeated and is due to be published in January 2021)

Amazon is likely to overtake Carrefour in 2020 and may even challenge Aldi. But it will be a long time before it challenges Schwarz Group whose sales are still more than double Amazon’s.

Figure 1: Top 10 retailers in Europe, 2017-19
2017 2018 2019
1 Schwarz Group Schwarz Group Schwarz Group
2 Tesco Tesco Tesco
3 Carrefour Aldi Aldi
4 Aldi Carrefour Carrefour
5 Edeka Edeka Amazon
6 Rewe Rewe Edeka
7 Amazon Amazon Rewe
: : : :
: : : :

2020 and COVID-19

We cannot provide a comprehensive update here of progress so far in 2020 – most companies have not yet reported anything other than short periods during the year. However, one can see some of the COVID-19 impact in retailers that are quoted. In general, non-food retailers have seen extended forced closures. Food retailers have benefitted from more people staying at home and restaurants being closed.

Food retailers

But even for the food retailers it hasn’t been quite so simple. In France the hypermarkets suffered during the lockdown and Carrefour’s like-for-like sales were up only 0.7% in the first half, though up 3.8% in the third quarter. In the UK, Tesco’s first half sales were up 8.6% and Sainsbury’s rose only marginally less. Both reported higher underlying profits however.

Non-food retailers

It has been the non-food retailers that have been hardest hit. Many have been able to promote their online offers, but that has been nowhere near enough to offset the loss of business through physical stores.


Dufry is a good example of one of the worst affected retailers. It mostly operates duty free outlets, mostly in airports. It is hardly surprising that sales have fallen sharply and, while the company puts on a brave face in its third quarter results, saying that there was an encouraging recovery in business over the summer, the fact remains that sales in the first three quarters were down 68%. There are no profit figures for the nine-month period, but after six months Dufry’s loss was CHF1,045 million compared with a loss of CHF 51 million in 2019.

Duty free is a good example of a business that is likely to see fundamental long term changes as some long distance travel is likely to be replaced by electronic communication. Little wonder then that in December 2020, Dufry’s share price was 45% lower than 12 months earlier. The surprise, perhaps, is that it hasn’t fallen further. The market has taken the view that the business will survive and eventually recover.

High street retailers

M&S’ non-food sales fell 40% in the six months to the end of September and that was in spite of a 34% increase in online sales. With a half year ending a couple of weeks before M&S and with no online offer at all, one might have expected Primark’s figures to be much worse. In fact Primark’s sales fell by “only” 45%.

Next, on the other hand, fared better. Its sales to the end of July fell by 34%, but its online sales fell as well, partly because of disruption in the warehouse in March and April.


Superdrug, a recent high flyer, suffered far worse, but in part that was because it had decided to try to pull back from persistent discounting. This is surely the right policy in the longer term as the constant discounting by retailers has undermined customer trust in retailers’ prices.


Discounting cannot make up for poor merchandise or lack of investment in stores. We have highlighted before how many ailing clothing retailers in continental Europe have failed in recent years – Vögele, M&S Mode, Sinn Leffers among others. 2020 has been the turn of the UK retailers. We have seen the failure of both Debenhams and Arcadia group as well as the final demise of Aurora.

Paradoxically this may in the longer term be good news for British high streets because it opens the way for new blood and new ideas. Arcadia is likely to be split up into its separate chains and freed of the group influence some of the individual businesses might succeed. In the short term, these failures will hit the high street hard because so much space will become vacant. But it is a necessary first step if the high street is to recover.

Online – the winners

There’s no doubt that the biggest beneficiary of the problems of 2020 has been online.

In the UK where such data is readily available from the Office for National Statistics in the eleven months to the end of November sales by online specialists (ie not including the online sales of store-based retailers) in the UK rose by 33%. Total online sales (ie including store-based retailers) rose by 47%. Online’s share of all retail sales rose from 18.5% to 27.4%. Note that this excludes December which is normally one of strongest months for online, and some trading in December will have benefitted from tighter restrictions in the month.

Implications for 2020 and beyond

It is clear that the survival of many retailers will depend on the amount of support they receive from the government and it seems likely that there will be many more failures around Europe before we finally emerge from the pandemic. While the development of vaccines gives hope, their impact on the high street remains some way off.

Some commentators argue that the present crisis has just accelerated the growth of online and that the long-term future for the high street is dire. But there are others who maintain that faced with the reality of online deliveries many people will be only too pleased to get back to physical shops.

We would be on the more optimistic side. As we set out above, the virus has accelerated the demise of many failing retailers and their disappearance opens the way for new, better retailers to take their place. The paradox of the situation the retail sector finds itself in is that the high streets should emerge fitter and stronger in the long term, even if the process of getting there will have been traumatic.

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