In recent years the discounters have built a considerable presence in the Spanish market, where their price-conscious approach is finding favour with consumers already accustomed to a strong own-brand and private label culture. This, combined with the hypermarkets having their hands tied when it comes to expansion, due to restrictive planning laws, is forcing other players to focus on improving and extending their own-brand stables in order to compete.

Growth in the supermarket format has been dynamic in recent years, with players taking advantage of the more lax planning requirements for smaller stores. Players such as Mercadona, whose business is concentrated on supermarkets, have been notable beneficiaries.

The sector has consolidated considerably in recent years, with a number of high profile acquisitions, including Caprabo’s purchase of Alcosto in 2003, and Dutch group Royal Ahold’s empire building, although the company has since sold its Spanish business into private equity hands as part of its Road to Recovery strategy, which has seen it concentrate on its home market. Similarly, Laurus, another Dutch player, has exited the Spanish market in recent years.