Look away, big four. The suffering will continue. At least for a while…
“Following the mantra that today’s weather is a pretty good prediction for tomorrow, it’s highly likely that the combined grocery market share held by the big four will continue to be squeezed in 2016 - perhaps down to only 70% by the end of the year,” predicts Fraser McKevitt, head of retail and consumer insight at Kantar Worldpanel.
In December 2015, the big four held a market share of 71.4% (down 0.3% from the November numbers) and McKevitt insists the “biggest forces dominating the change in shopping habits aren’t going anywhere. An expanded store portfolio means Aldi and Lidl’s discounter model will reach a wider population, though their growth rate probably won’t return to the highs experienced in 2014.”
He adds the two are “also making concerted moves towards the centre ground of retail, firmly embedding themselves in consumers’ minds through high-profile sponsorships and edging towards the online world. But, of course, it’s difficult to predict when seemingly unstoppable trends might wane - who can honestly say they called Tesco’s peak share of the market in 2007?”
The discounters’ focus on quality is their “biggest point of difference” says Tom Savigar, chief strategy officer at The Future Laboratory. “Lidl challenges perceptions and delivers on both quality and price, as their numerous surprise advertising campaigns have shown. The lessons here are clear: middle and upper class consumers are not solely shopping at Lidl and Aldi because they are cheaper. Consumers are searching for convenience, not superstores; they want local products not just a basics line; and they demand quality without a huge price increase. Give your consumers all those things, without confusing them on price, and they will happily walk through your doors.”