Research - 30.01.2025 - 09:00 

Market entry of the discounter Action: Challenges for Swiss retailers

What should Swiss retailers bear in mind when the Dutch non-food discounter Action enters the Swiss retail market? This is the subject of the Trend Report published today by the Institute of Retail Management (IRM-HSG) at the University of St.Gallen.

The Trend Report published by the Institute of Retail Management (IRM-HSG) analyses Action's business model and explains how the low prices come about. 

Market entry with disruptive potential

Attractive low prices, a standard range and a dynamic assortment with around 150 new items per week are part of Action's corporate strategy. The discounter is also achieving high growth rates across Europe thanks to its efficient supplier network. 

Across seven product groups, the Action discounter's shopping basket is on average 23 % cheaper than that of the Chinese online retailer Temu in the entry-level price segment. Action offers significant price advantages in the four product groups household, personal care, office & school supplies and garden & crafts. 90 % of the products cost less than five euros. Action achieves these price advantages through efficient processes and low-cost locations – an approach that presents Swiss retailers with new challenges.

“The market entry of Action in the course of 2025 could intensify the price war in the Swiss retail sector – especially in the non-food segment.”
Prof Dr Thomas Rudolph, Director of the Institute of Retail Management (IRM-HSG)
“For many retailers, it will be a balancing act to keep their prices competitive without further jeopardising margins that are already under pressure.”
Prof Dr Thomas Rudolph, Director of the Institute of Retail Management (IRM-HSG)

Recommendations

The authors of the study make the following recommendations for Swiss retailers:

  • Prepare early: take Action's market entry seriously and analyse the new competitor carefully – the examples of Aldi and Lidl 15 years ago show the potential of such discounters.
  • Increase cost efficiency: Realise further savings to cushion the expected decline in margins.
  • Differentiation instead of price wars: Focus on strengths such as quality, regionality and excellent service and create unique customer experiences, e.g. through events and innovative consulting approaches.
  • Strengthen customer loyalty: Intensify personalised communication and use targeted loyalty programmes to increase long-term customer loyalty.


The Trend Report Action can be downloaded here: redx-irm.ch/action


Image: Adobe Stock / PixelBiss

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