The discount store is no longer just the place to go shopping when your income isn’t enough. It is also becoming a conscious choice for a part of the middle class, which tries to defend its standard of living by transferring some purchases to more convenient brands.
The signal comes from Pepco, a European chain specializing in low-priced clothing, household products and everyday items. After a particularly positive quarter, the group has raised its underlying net profit forecast for the entire financial year: expected growth now exceeds 60%. Comparable revenue, excluding FMCG, rose 9.5% in the latter part of the fiscal year.
CEO Stephan Borchert has indicated Italy and Spain among the markets in which the company is observing the entry of middle-class customers, who are increasingly inclined to seek low prices. The indications derive from payment data and the average value of transactions, not from a statistical classification of income. Pepco’s result, therefore, does not in itself prove that the entire Italian middle class is running towards discount stores. However, it offers a concrete observation point on a more widespread change.
Because the discount is no longer just for low incomes
The discount model has changed. It no longer offers exclusively essential products, reduced assortments and peripheral sales points. The new chains have expanded the offer, improved the organization of the stores and introduced seasonal collections, household items, clothing, cosmetics and small accessories.
The customer has also changed. Entering a discount store is not necessarily perceived as a sign of economic difficulty. For many consumers it represents a form of optimization: spending less on products considered interchangeable to conserve resources to be allocated to expenses considered more important.
A family can choose a cheaper detergent, a t-shirt or a piece of furniture without giving up holidays, the children’s gym or a dinner out. The low price becomes a tool to protect some habits, not just the consequence of poverty.
This strategy is defined as trading down: the consumer moves down the range, changes brand or commercial channel, but continues to purchase the product. More customers in discount stores do not automatically mean more consumption: they may indicate that the same expense is transferred from one store to another or that families purchase smaller quantities.
Italians spend more, but buy less
The latest data on retail trade describes the paradox well. In August, Italian sales increased by 0.5% in value compared to the same month in 2025, while they decreased by 1% in volume.
In other words, the amount passed through the coffers increased slightly, but the quantity of goods purchased decreased. The phenomenon is even more evident in non-food products, with sales increasing by 0.2% in value and decreasing by 1.3% in volume.
The complete Istat report on retail trade also allows us to understand where purchases are moving. Food discounters are growing more than supermarkets and hypermarkets, while large-scale non-food retailers also record a significant increase in quantities sold.
| Commercial channel | Sales in value | Volume sales | Indication |
|---|---|---|---|
| Food discounts | +1.4% | +0.1% | They are growing more than supermarkets and hypermarkets |
| Supermarkets | +1.0% | -0.3% | Revenues increase, quantities decrease |
| Hypermarkets | +0.4% | -1.0% | It is the weakest food format |
| Large non-food distribution | +3.8% | +4.4% | The products purchased also increase |
| Small surfaces | -0.7% | -2.5% | They lose both value and quantity |
| E-commerce | +5.4% | +3.6% | It remains the most dynamic channel |
Food discounters advanced by 1.4% in value, against 1% for supermarkets and 0.4% for hypermarkets. The difference is even more significant in volumes: in discount stores they increase by 0.1%, while they decrease by 0.3% in supermarkets and 1% in hypermarkets.
Large-scale non-food distribution, the segment closest to the market in which Pepco operates, grew by 3.8% in value and 4.4% in volume. The data does not only concern discounters and does not allow us to isolate the sales of the individual chain, but confirms the ability of large networks to intercept a demand that is moving away from traditional formats.
Small stores in particular are losing ground, with sales down 0.7% in value and 2.5% in volume. In the non-food sector alone, the decline in quantities reached 2.9%.
The change, therefore, does not exclusively concern how much Italians spend. It’s about where they choose to spend.
The shift towards discounters and online shopping had already begun
The Istat report also contains an indication of a structural nature. In the system used to represent the weight of the different forms of sales, the share of food discounters went from 5.4% of the 2015 statistical base to 6.5% of the 2021 base. In the same comparison, that of hypermarkets fell from 11.6% to 8.5%.
E-commerce also changed size, going from 1.9% to 5%, while the weight of supermarkets rose from 16.7% to 17.5%.
They are not changes referring to the last year and do not directly measure the current choices of the middle class. They show, however, that the transformation of sales channels was already underway before the latest acceleration in prices: large generalist structures are downsizing, while the most convenient formats and those that allow you to quickly compare offers gain space.
Which purchases get “downgraded” first
Families don’t all cut expenses in the same way. First they intervene on products for which brand and place of purchase have limited importance. Cleaners, household items, basic clothing, accessories, seasonal decorations and small personal care products are easily replaceable.
These are precisely the categories on which the offer of chains like Pepco focuses. His result is significant because it suggests that the trading down is moving beyond the food perimeter alone to affect a larger part of daily consumption.
| Type of expense | Possibility to save | Most likely reaction |
|---|---|---|
| Detergents and household products | High | Change of brand or sign |
| Essential clothing | High | Discount, outlet or postponed purchase |
| Home furnishings and accessories | Medium-high | Less expensive or second hand products |
| Basic food | Average | Private label and promotions |
| Electronics and furniture | Average | Online comparison or referral |
| Rent, bills and transportation | Low | Reduction of other expenses |
| Health and education | Low | Resort to savings or selective cuts |
The greatest pressure arises from expenses that are difficult to compress. Rent or mortgage, utilities, mobility, health and education absorb a significant portion of income. When they increase, the family recovers margins by intervening on the rest.
The discount store thus becomes the compensation valve for the domestic budget.
Inflation especially affects frequent purchases
In September, Italian inflation rose, according to provisional estimates, to 4.2%, from 3.3% in August. The acceleration depends above all on energy, but the prices of the most frequently purchased products grew by 5.3%.
The so-called shopping cart – food and home and personal care products – recorded a more modest increase, equal to 1.7%. Perceiving inflation, however, does not only depend on the general average: the frequency of purchases and their visibility count. Bills, fuel and everyday goods influence decisions much more than products purchased once every several years.
The provisional data are contained in the latest Istat report on consumer prices. A family can have a higher nominal income than a few years earlier and still feel poorer. This happens when wage increases do not entirely recover the cumulative growth in prices or when non-deferrable items especially increase in price.
Even slowing inflation, when it occurs, does not automatically return prices to previous levels.
Change shop before changing lifestyle
The middle class is not defined solely by income. What counts are job stability, housing, the ability to save and the ability to face an unexpected expense without compromising the budget.
When these margins narrow, families initially try to maintain their lifestyle. Before giving up on a trip or an activity for their children, they can choose less expensive clothes, reduce brand loyalty and compare prices more often.
A selective consumer is thus established: willing to pay more for what he considers important and extremely sensitive to price for everything else. The same person can buy a premium smartphone, fly with a low-cost airline and buy household items at a discount store.
This apparent contradiction reveals a polarization of consumption. It is not necessarily the most expensive or the cheapest products that suffer, but the intermediate range which lacks a strong identity: too expensive to compete on price, not distinctive enough to justify a higher cost.
What the success of discounters really says
Pepco’s growth does not justify the conclusion that the Italian middle class has become poor. He says, however, that the boundary between the different consumption channels is dissolving. Discount stores attract broader social groups, while families distribute their money more selectively.
The phenomenon brings with it two important considerations. The first is positive: consumers react to price increases, compare alternatives and try to protect their balance sheet. The second is more worrying: convenience is sought because the ability to purchase goods and services does not grow at the same rate as nominal spending.
The signal to watch is not just how many people enter discount stores. We need to understand whether the change of sign allows them to maintain the quantities purchased or represents the last defense before giving up.
A crowded discount store can tell the story of the efficiency of a business model, but also the difficulty of a middle class which, in order not to openly retreat, has begun to silently change its way of spending.
