The Rising Success of Discount Supermarkets

WHAT?
Aldi, Lidl and Poundland have all seen sharp rises in sales since the recession – with Aldi being the fastest growing retailer in the UK. 51% of us now visit these stores at least once a month!

WHERE?
UK

WHEN?
Largely since the 2008 recession

HOW?

  • Fewer varieties per product → smaller stores, warehouses & ↓ transport costs → ↓ overheads
  • ↓ money spent on packaging design → simple designs often inspired by big brands → ↓ R&D costs
  • In-store sales only → no on-line retailing → ↓website/delivery/warehouse costs → ↓ overheads
  • More affluent customers → ↓ stigma towards discounters → saving money is praised rather than shunned → ↑ revenue
  • Quality → same if not better quality than traditional brands → blind taste tests show few differences  → consumers switch brands → ↑ revenue

SO?

  • ↑ stores opening
  • ↑ customers
  • Lidl, Aldi and smaller discount chains will continue to expand within the UK
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