Discounters open more stores than big four

By Nicholas Robinson contact

- Last updated on GMT

The discounters opened more stores than the Big Four last year
The discounters opened more stores than the Big Four last year

Related tags: Wal-mart, Tesco

The discounters, such as Aldi and Lidl, are opening twice as many stores as the big four, new research from the Local Data Company (LDC) has shown.

Between 2010 and 2015, the discount retailers (see panel) opened 1,367 units, which was a growth rate of 48%, according to LDC figures.

The big four retailers – Tesco, Asda, Sainsbury and Morrisons – opened just 582 new units during the same period, it showed.

Last year, the discounters grew at twice the rate of the big four supermarkets, with each discount store growing on average by 33 stores, compared with the big four’s 16 new stores.

More than 1,400 towns were surveyed for the report, 10% of which didn’t have a discount store in 2010, it claimed.

Success of the discounters

Discount stores analysed:

  • Aldi
  • Lidl
  • Iceland
  • 99p Stores
  • Poundland
  • Poundstretcher
  • Poundworld
  • Home Bargains
  • B&M Bargains
  • Farmfoods

By March this year, every town in the survey had at least one discount store, which highlighted the success of the discounters’ growth strategy, it said.

However, city analysts have claimed the discounters’ growth would soon slow.

The “free meal”​ that the discounters had enjoyed for so long would eventually come to an end​, Shore Capital director and head of research Clive Black has said on more than one occasion.

Aldi and Lidl, for instance, had boosted their number of stock keeping units to satisfy growing consumer demand, particularly for fresh and chilled produce, he claimed.

“People don’t go to Aldi and Lidl for German biscuits, of course they don’t,” ​Black told a Federation of Bakers’ conference earlier this month (June 2).

‘Person they tried to beat’

“Shoppers go to the discounters to get cheaper fresh and chilled products, which means Aldi and Lidl have to stock more and more as they grow – becoming the person they tried to beat,” ​he said.

Big Four analysed:

  • Tesco
  • Asda
  • Sainsbury
  • Morrisons

Aldi had become the UK’s sixth largest supermarket in April this year, taking 5.3% of the market and overtaking Waitrose. While Lidl holds 3.7% of the market.

The German discounters’ growth had slowed in recent months and were unlikely to ever achieve the more than 20% growth they had become used to, he added.

Meanwhile, Conlumino consultant Greg Bromley also advised all of the discounters that the recovering economy would threaten their growth.

“As the economy continues to recover and disposable incomes grow, ​[the discounters] will find it more challenging to ensure their positions retain relevance.”

Related topics: Ambient foods

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