Aldi and Lidl’s pursuit of smaller-format stores is set to ramp up the pressure on local independent retailers, according to a new report by Him.
A survey which followed the opening of the first Aldi Local found 42% of shoppers would travel further than their local store to reach one of the discounters.
It ‘highlights the challenge that this could cause local, independent retailers and highlights the size of the threat that discounters pose’, according to the report.
Aldi Local is a sub-brand to differentiate the discounter’s smaller city stores from its full-sized ones. The first opened in Balham in March this year, and in June Aldi announced the name would be rolled out to seven more London branches.
The stores are as small as 5,000 sq ft and sell a slimmed-down range, with no general merchandise and more focus given to chilled food to go and food for tonight.
The Him report highlights that - as revealed by The Grocer in April - Lidl has shrunk its minimum London site requirements, from 10,000 sq ft to 7,000 sq ft. That was followed in June by Lidl’s announcement of a £500m expansion plan to open 40 new London stores including its most central yet, on Tottenham Court Road.
Both discounters have denied it represents a move into convenience, but Him’s Discounting in 2019 report said: ‘It is hard to see how the introduction of smaller-format Aldi and Lidl stores will not impact convenience retailers.’
The report highlights steps to improve convenience, including the introduction of Aldi’s first self-checkouts, also revealed by The Grocer, in April. It predicts uncertainty caused by Brexit could push more shoppers to travel further to reach a Lidl or Aldi, and that retailers could have to cut prices to keep up.
‘Uncertainty around Brexit and the impact it will have on disposable income is one of the catalysts for consumers considering travelling further in order to save on grocery spend… As economic uncertainty grows, retailers may need to become less reliant on location and focus on value and price.’
Earlier this month plans were revealed for an 18,000 sq ft Lidl in Hammersmith’s King’s Mall, due to open in 2020.
“We are delighted to be opening a new store in Hammersmith, which marks another milestone in our ambitious store expansion programme,” said Lidl GB’s regional head of property Olu Johnson.
“We’ve seen incredible demand for Lidl stores across the country and look forward to offering our quality products and incredible value to shoppers in and around Hammersmith.”