Budget minded consumers heading to discount stores
The many different price hikes that have been encountered by consumers in the UK over recent months have had a very damaging effect on household finances, and most families have found it difficult to make ends meet each month due to increasing petrol prices, energy usage costs, borrowing costs, and bills. However, one of the things that has put particular strain on many household budgets is the soaring cost of food, with food inflation having rocketed over the past year, adding hundreds of pounds onto the average annual grocery bill.
Financial strains amongst households means that many have had to look for different ways in which to cut back on costs, and one of the routes that many families have taken is to reduce the amount that they spend on their shopping. Although the major household name supermarkets, such as Asda, Tesco, and Sainsbury’s, have been trying to put on a variety of special promotions in items such as staple foods, fruit, vegetables, etc. the cost is still too high for many families, particularly larger families with lots of mouths to feed.
This, it seems, is why many have decided to turn to what are known as the discount stores, such as Lidl, Aldi, Netto, and even Iceland. According to a recent report these stores have seen their market share rise to 6.1%, which is the highest share of the market that they have enjoyed. Recent reports have suggested that many customers are going to the larger supermarkets less and less, and instead are aiming to do the bulk of their shopping at the discount stores and only heading to the larger supermarket chains for items that are not yet available through the smaller discount chains.
However, recent reports have suggested that on the back of rising custom many of the discount stores are looking at increasing their product range, and this could mean that people don’t have to head to the major supermarket chains at all if they can get everything that they need from one of the discount stores. Aldi and Lidl in particular have been looking at rapid expansion plans across the UK as a result of their recent success. In the twelve weeks to August 12th Aldi saw its market share rise by nearly 20% compared to last year, whilst Lidl saw its market share rise by 12.3% and Iceland saw its market share rise by 14.4%.
One official said that the data gave the “clearest picture yet that retailers with a clear price message are posting the strongest performances.”
He added: “It is worth noting that this growth is entirely driven by new stores and new shoppers – spend levels for existing shoppers remain unchanged and quite low compared with the top four”.
In the meantime the major supermarket giants continue to run various promotions on certain foods in order to try and stay a step ahead of their competitors, but officials state that in order to regain custom from the discount stores they will have to do better in terms of pricing.
Tags: supermarkets, Lidl, Netto, budget stores, Aldi, Iceland
