Discounters are on the rise across UAE

A well-established concept in the West, discounters have caused a paradigm shift in the retail landscape. Popular supermarkets have lost market share to the channel over the last 10 years: in the UK, for example, discounters like Aldi and Lidl have quadrupled their share of volume purchased – eating into the share once held by Tesco, Asda and Morrisons.

In the face of the ongoing global cost-of-living crisis, discounters are expected to further increase their share of the grocery market, prompted by cash strapped households looking for bargain buys.

While in the UAE the discounter format is relatively new, it has been readily embraced much like in other global regions. Notably, one of the early adopters, VIVA – which opened its doors in 2018 – now has a substantial reach, catering to around one third of the households in UAE, with a penetration of 27%, almost doubling in two years.

Although VIVA’s growth has been fuelled by the recent pandemic – spend grew by 35.5% and volume by 40% in 2021, when households were looking for greater value for every dirham they spent – the momentum has not slowed. Spend increased by 95.6% and volume by 89.5% in 2022. This suggests that households will always tend to resort to value-seeking measures in times of crisis.

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