Three events in the past week point to the impact of the hard discounters across Europe. Last week's Allegra report highlighted the growing appeal of German discounters Aldi and Lidl in the UK. Wal-Mart announced its withdrawal from Germany and Tesco purchased Leader Price in Poland.

German and UK customers view the hard discounters differently. The Aldi/Lidl discount format is broadly accepted across Germany as the place to do a full grocery shop. Efficient buying and supply chain practices, tight cost control and low margins make it difficult for new entrants to compete in their home market. So it's no surprise that Wal-Mart has finally accepted the inevi­table and withdrawn from its ill-­fated venture in Germany.

The question for the UK market is how strong Aldi and Lidl can become here. The Allegra report notes the number of stores will grow to 1,100 by 2010, up from 535 in 2000. Most commentators would expect an even faster rate of store growth. A market share estimate of 10% would appear conservative.

The German discounters are ­finally breaking through the barrier from budget shoppers to mainstream shoppers. A visit to an Aldi or Lidl will reveal some limited recognisable brands, good value processed fresh foods and strong non food offers. A growing number of customers are buying lesser-known unique brand names. Always better on price and often on quality, Aldi and Lidl buy well on these products and will start to steal business from the mainstream supermarkets.

Which leads us to Tesco's purchase of Leader Price in Poland from Groupe Casino. While Tesco highlights the convenience nature of Leader Price stores, it may find considerable benefits in the sourcing operation to help it see off the threat from Aldi/Lidl in the UK. Leader Price stores carry no brands and only stock 2,000 or so Leader Price products. Many of the products are sourced from the same or similar factories that supply Aldi/Lidl. ­Tesco may learn something about the cost base of its UK own labels and its rela­tive margin expectations.

Indeed, is it fanciful to suggest the purchase of Leader Price is an attempt to consider the re-establishment of a discount format in the UK? Tesco last operated a discount chain in 1984, when ­Victor ­Value was sold. Will the expected growth of Aldi, Lidl and Netto lead to a return to these discount roots?