Big four’s market share ‘gone for good’: analyst
Despite the big four finally waking up to the discounters and changing how they operated, Aldi and Lidl would continue to be “fleet of foot” with their smaller business models, Julian Wild, head of the food team at Rollits solicitors, told FoodManufacture.co.uk.
“The major retailers have finally woken up, changed their management – years too late – and are now responding,” he said.
“But, they are too big and too slow to react effectively and with too much floor space.”
The discounters were here to stay, there was no doubt about that, Wild added. Their businesses had proved to be very successful in Europe for many years and they would replicate that success in the UK for years to come.
‘A free run’
Should we discount the discounters?
- Clive Black: “Aldi and Lidl have to stock more and more as they grow – becoming the person they tried to beat.”
- Julian Wild: “The discounters are more fleet of foot and have the right sized stores.”
“They will continue to do what they do best,” said Wild. “The big four grocery retailers have given the discounters a free run to do that.”
Wild’s comments contradict those made earlier this month by Shore Capital director and head of research Clive Black, who claimed Aldi and Lidl could be on a path to destruction, potentially becoming “the person they tried to beat”.
Aldi and Lidl had increased their stock keeping units in a bid to satisfy growing consumer demand, particularly in fresh and chilled food, Black said.
As a result, the pair were overtrading in those areas, such as fresh and chilled, and were having to throw out more stock, he claimed.
“People don’t go to Aldi or Lidl for German biscuits, of course they don’t,” said Black.
‘Person they tried to beat’
“Shoppers go to the discounters to get cheaper fresh and chilled products, which mean Aldi and Lidl have to stock more and more as they grow – becoming the person they tried to beat.”
Wild conceded that the discounters growth would slow, but rejected the idea that they would ever change their business models and become anything like the big four.
Meanwhile, the discounters’ were easier to work with than the big four, food and drink industry leaders heard at the Food Manufacture Group’s Business Leaders Forum in January this year.
“Surprisingly, if you talk to suppliers, they will actually say that Aldi and Lidl are good people to do business with,” said Ed Garner, director with consumer insights specialist Kantar Worldpanel.
Discounters were “more straight forward to deal with” and the cost of doing so was less than the major multiples, which required teams of dedicated people and more time to service, he added.
