How shopper perceptions of discounters are changing

UK shoppers are changing their perceptions of some of the country’s major retailers, according to the IGD. The group has published a series of facts about the changing grocery sector in response to Tesco’s launch of discount brand Jack’s.

The IGD says that more than half (53 per cent) of UK shoppers now perceive Aldi as a supermarket rather than a discounter, which is how 40 per cent still describe it. Similar figures – 50 per cent to 40 per cent – are applied to Lidl. More than half of London shoppers say they would shop at Aldi or Lidl if there were a store closer to them.

Shoppers are also using these stores for a main shop, with 47 per cent of Aldi shoppers using the store for their main shopping trip, compared to 41 per cent a year ago. Some 84 per cent of UK shoppers visit a discounter at least once a month.

More than a fifth (21 per cent) of discount shoppers say they were looking to buy an evening meal on their last shopping trip – the same proportion as supermarket shoppers. The discount channel has the highest cash growth sales forecast over the next five years, growing by 37 per cent from £23.1bn in 2018 to £31.5bn by 2023. The IGD predicts that £1 in every £7 spent on groceries in 2023 will be spent a discount store.

Rapid store opening programmes have driven recent growth but the next stage may be more complex, says IGD director of insight Simon Wainwright.

“There are sizeable opportunities for growth in London and the south east, but competition for the best sites is intense, so we predict discounters will work closer with developers to unlock these sites; cities and towns will see multiple stores from the same discounter, which risks self-cannibalisation of sales. As the discount channel matures, maintaining sales growth will be a challenge,” says Wainwright.

“As competition within discount intensifies, differentiation will become more important for individual retailers to stand out. Exclusive products will help discounters to stand out from one another and make it harder for shoppers to compare prices across channels. A stronger and more impactful discount channel will depend on consolidation, centralisation and collaboration.”

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