Country Report
Denmark
(All monetary values are in Euro)
Country Report - Denmark
Table of Contents
DENMARK IN A PAGE ....................................................................................................................................................... 3
DASHBOARD................................................................................................................................................................................ 4
KEY CHARACTERISTICS ............................................................................................................................................................ 11
ECONOMY AND DEMOGRAPHY ................................................................................................................................................. 12
RETAIL SALES & FORECAST ..................................................................................................................................................... 14
RETAIL CHANNELS .................................................................................................................................................................... 16
TOP 5 COMPANIES.................................................................................................................................................................... 19
REGULATORY FRAMEWORK ..................................................................................................................................................... 21
BUYING AND PRIVATE LABEL STRATEGY ................................................................................................................................. 22
INTERNATIONALISATION ............................................................................................................................................................ 23
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Denmark In a Page
Inhabitants (mn)
GDP (EUR mn)
GDP / Real Growth %
CPI %
2013:6
2013:251,641
2013:1.2
2013:2.0
2012:6
2012:244,524
2012:0.511
2012:2.6
GDP / capita (EUR)
Consumer spending / capita
(EUR)
2013:45,008
2013:22,481
2012:43,853
2012:21,907
Summary
Retail sales have declined since the start of the global economic crisis. In 2011, however, retail sales recovered, but with Danish
economy showing signs of slowing in 2012 retail sales decreased as a result. This year retail sales are expected to increase.
Dashboard
Macroeconomics
Country Report - Denmark
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Consumer Spending
Top Companies
Country Report - Denmark
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Channel Leaders
Hypermarkets & Superstore Leaders
Supermarkets & Neighbourhood Stores Leaders
Country Report - Denmark
Discount Stores Leaders
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Key Characteristics
Economy in context
Denmark’s economy has shown robust growth during the years prior to the crisis. However, the economy was hit by the collapse of the
US sub-prime mortgage market in 2009 and the subsequent global credit crisis. The Danish economy has grown moderately over the
last couple of years and it did not show considerable improvement during 2012 partly due to ongoing crisis in Europe. The growth rate
is expected to be around 1% this year.
Market concentration
The Danish retail sector is highly concentrated, with the top five retailers capturing around 65% of grocery retail market. The top three
companies are Coop Danmark (FDB), Dansk Supermarked and Dagrofa, all of them domestic retailers.
Food market facts
The Danish food retail market is driven by quality over price. Danish people have a deep sense of appreciation for their traditional
foods. Opening hours of stores are extensive. Wholesaling to independent retailers and integrated trading are features of Danish
retailers.
Legal aspects
There are no major legal restrictions on trading. Shop opening hours are fairly relaxed, Sunday trading times are determined by local
authorities depending on yearly sales. Small stores are allowed to trade on Sunday. All stores have a number of "free" Sundays every
year when they can trade. Planning regulations have been severely tightened regarding the opening of larger stores in an effort to
protect town centres, the environment and independent retailers.
Economy and Demography
Population
With population being 5.5 million, women make up slightly more than half of the Danish population (51%). This is because of higher
mortality rates among men. Men are the majority in age groups of up to 58 years, however women take over in all successive ag e
groups. The 95 and over age group comprises almost four times as many women as men.
Of the population, 95% are of Evangelical Lutheran belief, 3% are Protestant and Roman Catholic, and Muslim make up 2%.
Languages spoken are Danish, and Faroese. A smaller ethnic group speaks Greenlandic (an Inuit dialect), and there is also a s mall
minority of German speakers.
Denmark is geographically split into several islands and its mainland, Jutland, which is the largest landmass within Denmark. The
capital of Copenhagen is on the island of Zealand, the second largest of Denmark’s home territories, which is als o a bridgehead into
Sweden. Denmark also has administrative control of the Faroer Islands and Greenland.
Economic Background
The Danish economy has shown robust growth throughout the last several years, rising from a low after the start of the new millennium.
An increase in domestic consumption and improving exports have resulted in higher growth rates over the past years. However, this
prosperous situation has come to an end. Denmark has become the first European economy to enter recession following the collapse
of the US sub-prime mortgage market in 2009 and the subsequent global credit crisis. The Danish economy has grown moderately over
the last couple of years and it grew by 0.5% last year partly due to ongoing debt crisis in Europe. In 2013 the real GDP is expected to
grow by around 1%.
Consumer price inflation
Over the past years, inflation in Denmark has been at stable levels, around the 2% mark. However, in 2008, consumer prices saw the
highest increase in 24 years. This was mainly due to the rise in international food prices. The financial crisis has led to a decline in
inflation, however in 2010 inflation grew to 2.3%. Although economy and consumer confidence slowed in 2011, the inflation rat e jumped
to 2.8%. In 2012, the inflation rate was 2.6% and this year it is expected to be around 2%.
Consumer spending
Consumer spending has been rising until 2008 but declined at the same rate as the GDP in the following two years and throughout
2010. This was due to falling consumer confidence. In 2011, consumer spending grew for the first time in three years, however,
uncertain economic environment partly due to European debt crisis dented consumer spending again in 2012; however, it is expected
to recover and show growth throughout 2013.
Economic Indicators
2013 (EUR)
Inhabitants
GDP
GDP per capita
GDP % nominal growth
Consumer Spending
Consumer spending per capita
5,591,000
251,641,201,724
45,008
2.83
125,691,335,081
22,481
Retail Sales & Forecast
Total Retail Format sales
Retail sales have declined since the start of the global economic crisis. In 2011, however, retail sales recovered, but with Danish
economy showing signs of slowing in 2012 retail sales decreased as a result. This year retail sales are expected to increase.
Food Retail Format sales
The population is in general categorical on food consumption, likely to compromise on other goods, rather than food. After two years of
decline, grocery retail sales recovered in 2011. Last year, however, was the year for negative growth again due to uncertain economic
environment. In 2013 food retail format sales are expected to grow marginally.
Growth & forecast
Growth forecast figures for both the Danish economy in general and retail sales suffered from the recession until late 2010 and 2011
showed moderate growth. However, during 2012 retail sales decreased again with gradual recovery expected this year. Although
Denmark's sovereignty in monetary politics resulting from its non-inclusion in the euro also shields it from common problems in other
European countries, it has led to substantial losses on interest rate differences having adverse effects on the economy.
Retail Market Sizes
2013 (EUR)
Total Retail Format Sales
Total Retail Format Sales per capita
Food Retail Format Sales
Food Retail Format Sales per capita
Total consumer spending
Total consumer spending per capita
Total Grocery Spending
Total Grocery Spending per capita
Non Grocery Spending
Non Grocery Spending per capita
46,791,274,401
8,369
23,385,458,018
4,183
125,691,335,081
22,481
27,081,396,903
4,844
61,991,522,650
11,088
Retail Channels
Hypermarkets & superstores
Hypermarkets and superstores are popular formats operated by market leaders Dansk Supermarked and Coop Danmark (FDB). Both
have relatively large networks considering the size of the country and its small population. However, growth of these formats has been
minimal over the last years as planning restrictions have been imposed by local authorities on outlets larger that 3,000 square metres.
Supermarkets & neighbourhood stores
Supermarkets are the most domineering format on the Danish market. They service the many smaller communities scattered across the
Danish mainland and islands. Danish supermarkets are modern and focus on quality foods rather than price and offer broad services to
their customers.
Country Report - Denmark
Discount stores
The discount sector is very important in the Danish market, as the pricing factor is an effective way for the discounters to distinguish
themselves. The sector has grown by 45% in terms of sales over the last five years. Domestic retailer Netto is the market leader,
followed by Norway-based Reitan owned Rema 100 stores and Coop Danmark (FDB) owned Fakta stores. German Aldi and Schwarz
Group-owned Lidl are the only true hard discounters on the scene.
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Country Report - Denmark
Convenience & forecourt stores
Traditionally independent kiosks have filled the niche of inner-city convenience retailing. However, modern convenience stores such as
7-Eleven are expected to move forward in the coming years. Reitan has been operating 7-Eleven stores as their franchise holder in
Denmark for several years and is continuing to expand the format. It entered a joint venture with Shell in August 2007.
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Top 5 Companies
Retail environment
The Danish retail market is highly mature and is largely dominated by chains of multiples operating a variety of modern retail formats
from hypermarkets to convenience stores. The majority of the leading players are domestic companies. Independent stores have been
falling in numbers lately as market concentration and consolidation is increasing among the top players. All major players operate a
national network stretching out across the Danish mainland and its several islands.
Top Grocery Retailers In Context
Four of the top five retailers in Denmark's very highly concentrated market are domestic companies, with Reitan featuring as the only
foreign player. Leading retailer Coop Danmark (FDB) has a strong co-operative based structure.
The top players compete on similar grounds, mainly in the supermarket and neighbourhood sectors. Dansk Supermarked and Coop
Danmark (FDB) are the only retailers operating hypermarkets and supermarkets. Dagrofa has been traditionally serving independent
chains as a wholesaler, while also operating the SPAR chain in the country.
Top Grocery Retailers 2013
Company
Number of Outlets
Total Sales Area
SQM
Average Sales
Area SQM
Grocery Banner
Sales (EUR)
Grocery Spending
Market Share
1,285
1,037,600
807
6,205,907,391
22.92
Dansk Supermarked
566
650,970
1,150
4,626,151,497
17.08
Dagrofa
777
433,633
558
2,942,801,421
8.72
Reitan
732
249,510
341
2,757,159,706
10.18
SuperBest amba
194
170,720
880
1,268,140,600
4.68
Coop Danmark
(FDB)
Regulatory Framework
Property regulations
The Danish parliament restricts authorisation of stores larger than 3,000 square meters in out-of-town locations. Consequently, new
large stores are authorised only in exceptional cases. Local authorities decide the approval of building applications. The ai m of the
planning law is to protect town centres, smaller and independent retailers and encourage a more environmentally friendly retail
structure, with shorter journey times for both shoppers and suppliers.
Opening hours
From October 1 2012, all retailers in Denmark extend opening hours and stay open on Sunday, after Danish authorities passed the new
law.
Pricing
Prices in general are higher than in other European countries because of the high food VAT of 25%. Prices for alcohol are ver y high
compared to other European countries, similar to Sweden and Norway. In general, pricing is a way of distinguishing one's stores from
others. Most supermarket chains operate on a quality-based policy, so discounters attract consumers considerate of prices. The entry
of Lidl to the market has led to a greater price-led competition.
Buying and Private Label Strategy
Wholesale
The wholesale sector in Denmark is very important to retailers, some delivering to their own stores via their wholesale operations.
Dagrofa is an important player in delivering to independent stores via its wholesale division.
Manufacturers
There is a large number of companies on the Danish food manufacturing sector. Nevertheless, the sector is highly concentrated. For
example, Danish Crown achieves a market share of more than 50% in the meat and poultry sector, while MD Food captures more than
90% of the milk and dairy products market.
Private labels
All major Danish retailers run broad private label ranges, from premium-priced organic lines to standard to economy lines. Market
leader Coop Danmark (FDB) has its grocery product brand range of around 800 items at standard prices across all grocery banners.
Danks Supermarked has a wide private label offer aimed at different customer groups due to its portfolio of hypermarkets, superstores
and discount stores. In collaboration with suppliers and manufacturers top retailers have developed a series of articles and series which
either carries the Nordic Swan or the European Ecolabel EU Flower.
Internationalisation
Inward investment
The majority of foreign companies investing into Denmark are German retailers. Leading retailers Schwarz Group-owned Lidl, Metro
and Aldi all have long-standing businesses in the country. Of these, hard discounters Aldi and Lidl are relatively small players in the
discount market. Metro is concentrating on its Cash & Carry operation. Scandinavian retailer Reitan is also active in the country,
however with smaller operations than its German competitors. Reitan operates its franchised 7-Eleven convenience stores and its
Rema 1000 discount stores in the country.
Outward investment
Majority of Danish retailers confine themselves to the domestic market. This is mainly due to their co-operative or wholesale based
structure, which tightly links them to their retail environment. Dansk Supermarked is active in three foreign markets with its Netto
discount formula. In 2013 another retailer Coop Danmark plans to open two discount banner Fakta stores in Germany.