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The Rise Of Discount Stores Isn't A Surprise, It's A Sign Of The Times

23/08/2017 15:02

It's official; Lidl is more popular than Waitrose. The German discount brand is now the UK's seventh most popular supermarket, and depending on which paper you read it's either the demise of the middle classes or a line in the sand for discount retailers. But whichever your viewpoint, it's nothing new.

Discount and value retailers have been on the rise for many years. When people felt the pinch during the economic crisis of the late noughties, thousands turned to the likes of Aldi and Lidl to make savings on their weekly shopping. And as it became socially acceptable to shop for value, more and more of us did it. One survey way back in 2014 showed that four in ten people who earn more than £50,000 shopped in discount and value retailers - the 'Lidl classes'. It would be interesting to see the same research repeated today as one suspects the trend has continued.

The rise of the discounters

So too has the rise of the German grocery discounters. In 2015 Aldi overtook Waitrose as the UK's fifth most popular supermarket and after years of continued growth Lidl now has its biggest ever share (5.2%) of the UK grocery market. 30% of Britons now admit to buying cheaper grocery brands to save money.

It was no surprise, therefore, when figures out this week showed that Lidl has overtaken Waitrose as the seventh most popular supermarket (behind Tesco, Sainsbury's, Asda, Morrisons, Aldi and Co-op). This is no flash in the pan - it's a societal trend towards value-led stores. We've seen it in other retail categories too, with the likes of Poundland and B&M also opening more and more stores as demand for value continues.

Seeking value

We have become a nation of bargain hunters, armed with online discount codes - the 21st century version of paper coupons - and a desire for value stores. As the cost of grocery shopping continues to rise in line with inflation, savvy consumers are shopping around for value - and they're not afraid to tell their neighbours about it.

Make no mistake, these are challenging times for the conventional 'big four' supermarkets, with the twin pressures of inflation and tighter margins, among other headwinds. And with the cost of groceries set to rise again, this won't be the last time we read about Aldi and Lidl gaining market share.

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