Discount retailers should set their sights on the UK and France as the economic downturn bites, a study published today (28 November) has claimed.
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The two markets represent a “golden opportunity” for the likes of Aldi and Lidl due to the low numbers of stores per capita, according to research analysts Verdict.
Aldi and Lidl have seen their share of the UK grocery market reach record levels this year as cash-strapped consumers are lured by their low prices.
Daniel Lucht, Verdict’s European retail analyst, who co-authored the study, said the German retailers should push on with expansion in the UK.
“Now is the time for the likes of Aldi and Lidl to pounce in the UK,” Lucht said. “As these players widen their store portfolio and the discounter network as a whole they will further drive sales through the channel.”
Aldi has claimed that a wide range of UK shoppers, not just those on low incomes, has visited its stores in recent months. Lucht believes the previous downmarket image of the discounters will fade as they expand throughout the UK.
“A denser discounter store network in the UK will make shopping at the discounters more common and socially acceptable. Past experience suggests that once a discounter opens in their catchment consumers will give it a try,” Lucht said.
In France, imminent changes to planning regulations should provide an opportunity for further expansion, the Verdict report said. Changes to the loi Raffarin set for January next year will raise the threshold of planning regulation exemptions from 300 sq m to 1,000 sq m, Verdict said.
Discounters account for 16% of EU grocery sales, the study said. In Germany, discounters account for around 43.8% of sales, compared to just 3.7% in the UK, according to figures from Verdict.
