It can be difficult to identify common trends across markets but, in many ways, two key trends have intensified in the grocery retail sector in 2013 in a number of countries – the durability of discounters and the heightened interest and investment in developing multichannel retail businesses.

There have been, in some Western markets, signs of economic recovery. However, while the macroeconomic data has improved, consumers remain cautious – and have continued to turn to discount retailers more often for their grocery shop.

Last month, data from Kantar Worldpanel claimed over half of the UK’s households visited either an Aldi or a Lidl in the 12 weeks to 8 December, underlining the inroads the discounters have made into the country’s grocery market.

During the period, each of the UK’s five largest grocers – Tesco, Asda, Sainsbury’s, Morrisons and The Co-operative Group – lost market share. Upmarket grocer Waitrose continues to enjoy rising sales and market share but the continued growth of the likes of Aldi and Lidl had a clear impact on the UK’s largest grocers last year. “Value continues to be a powerful incentive for the British shopper,” Kantar Worldpanel reported last month.

Over the Irish Sea, Aldi and Lidl are, according to Kantar Worldpanel, attracting new customers to their shops in Ireland. Over the English Channel in Europe, Lidl in particular has enjoyed a strong 2013. “Lidl has had a fantastic year, in terms of sales in the EU they are [now] the biggest retailer,” Daniel Lucht, research director and industry analysts ResearchFarm, says.

But it is not simply about price. There have, in the UK and in some European markets, been signs Aldi and Lidl have succeeded in luring in consumers not just via keen pricing but through investment in offering more fresh food.

And across the Atlantic, discounters and dollar stores continue to win over shoppers. Just before Christmas, Aldi announced plans to step up the rate at which it will open outlets in the US in response, it said, to growing demand from customers. Dollar stores are winning over shoppers with expanded ranges of grocery products. “We are continuing to see explosive growth in dollar stores as they continue to drive more dollars in food and consumables,” Neil Stern, senior partner at global retail consulting firm McMillanDoolittle, says.

The mainstream grocers are reacting. The opening days of 2014 have seen Asda, the UK’s second-largest grocer, set its sights on luring UK shoppers away from the discounters with moves to sell a range of household items for GBP0.50. The Co-operative Group, the number five food retailer in the UK, has launched an agressive price promotion in a bid to tackle its declining market share and grow basket size.

Next week will see Tesco report its sales for the Christmas trading period, with like-for-likes again forecast to be down. Tesco has come in for some criticism in the City for trying to move upmarket in a bid to arrest quarters of declining sales in the UK.

“The only clear direction is that Tesco in the UK is trying to move upmarket, this is against their core DNA as a value retailer. The quality sector is already crowded with players with a much better reputation in the field – Sainsbury’s, Waitrose [and] Marks and Spencer,” Sanford Bernstein analysts Bruno Monteyne and Richard Clarke wrote in a note last month after Tesco reported another quarter of lower sales. “Tesco has raised prices faster than anyone else, losing its value credentials along the way.” With Asda sharpening its pencil on price, and with the likes of Aldi and Lidl continuing to gain share, should Tesco look to win back still-cautious UK consumers with a renewed focus on price?

Mainstream grocers in the US are looking anxiously at the growth of the discounters and dollar stores. “The appeal of discounters continues to be strong in North America as a result of a relatively weak recovery and one that didn’t benefit a significant number of households,” Bill Bishop, chairman of US retail consultants Willard Bishop, says. “In addition, the appeal of off label/private label combined with the struggle many advertised brands are having to deliver a strong value proposition all support the growth of discounters.”

The UK and western Europe has been the key region for the second common trend in international food retail in 2013 – growing investment among retailers in developing multichannel businesses as consumers become more interested in shopping online.

For all of Tesco’s issues, the multichannel trend could offer the retailer a growth platform. Tesco accounts for just under 30% of total UK grocery sales; in the online channel, its share is larger. Asda is ramping up its investment online, especially in click and collect, while Morrisons, the UK’s fourth-largest grocer, has launched its first home delivery service this month.

However, Tesco continues to develop its multichannel operations, rolling out one-hour grocery home delivery slots to over 98% of the UK population and setting up over 200 grocery click-and-collect drive-through locations at its stores. “Our work to position Tesco as the leading multichannel retailer remains a strategic priority,” CEO Philip Clarke said last month. And, for its problems internationally, Tesco has also continued to develop its multichannel business, offering an online grocery service in around 50 cities.

Looking at the efforts European retailers have made online in 2013, Lucht highlights Ahold’s moves in the Netherlands and suggests it is benefiting from the experience of Peapod in the US. “Ahold know how to make online grocery work because they own Peapod in the US and a lot of the learnings over there they have brought back to Europe.”

He also points to the development of the click-and-collect and Drive networks in the UK and France. “Having stuff delivered to your home is nice but you have to pay for it and have to be in. You can see the use case for click-and-collect, especially against the macroeconomic background we have at the moment.”

The development of the online channel has been slower in the US, although the likes of Ahold’s Peapod continued to invest in 2013.

Amazon, however, is causing industry watchers to sit up and take notice. In 2013, it took its Amazon Fresh home delivery service to two more cities, Los Angeles and San Francisco. It is still very early days for Amazon and online grocery but US retailers will be watching Amazon’s venture with interest, for obvious competitive reasons but also to see whether a company that has become a worldwide online retail titan can make a success of the home delivery of food in a market where there has been some notable failures.

Bishop, also “chief architect” at retail technology consultants Brick Meets Click, insists US grocers need to start paying more attention to developing multichannel operations.

“This trend is still relatively new and evolving in North America and that evolution is probably occurring too slowly given the inroads that pure play online retailers are or are expected to make in the next year. Unfortunately, this wait and see attitude will wind up costing some retailers significant business unless, of course, they are themselves first movers,” he says. “Shop Rite operating in the New York, New Jersey, and Philadelphia markets is certainly ahead of the curve in this regard. Most other retailers still either haven’t left the gate or are pilot testing.”

Lucht suggests Amazon is also making retailers in Europe sit up and take notice. He points to the work the existing Amazon sites have done on offering wider ranges of FMCG products and suggests that has prompted increased investment from some major retailers on the Continent.

“Amazon has really driven what they term the consumables category this year – shelf-stable products,” he says. “They have made a concerted effort on that in the US, in the UK and in Germany. The next step is Fresh and they have started to make a lot of grocers in Europe took online a lot more seriously. In Germany for example, you have the likes of Rewe and Tengelmann investing in online start-up businesses, not so much on the grocery side of things but start-ups in general, to try and work out what to work out what is happening online.”

2013 was another year in which an evolving market – and changing consumer habits – put pressure on mainstream grocers. The next 12 months promises more of the same.