As the credit crunch continues to bite, so the discounters continue to thrive. Aldi has grown its market share a fifth over the past three months in the UK to 2.9% [TNS]. Lidl has done almost as well – it now has 2.4% of the market.

With IGD predicting the discount sector will grow almost 50% from £4.5bn in 2007 to £7bn by 2012, it is natural to assume there will be more opportunities for UK suppliers to secure listings for more of their brands and even own-label goods. In challenging times, the discounters represent an important growth channel for suppliers, says Gavin Rothwell, senior business analyst at IGD. “Suppliers want to put their products where people are shopping and it’s a limited-line model, so there’s a great sales opportunity.”

So how big is this opportunity? Two of the three discounters have recently increased their branded offers. For years a third of Netto’s lines by volume have been branded, but a rejig of its store format this year allowed it to increase its lines from 1,100 to 1,400, creating opportunities for suppliers. “We have always offered a mix and are constantly reviewing and developing ranges so shoppers can save without compromise,” a spokesman says.

Taking a leaf out of Netto’s book, Lidl too has boosted its branded offer. Rothwell estimates 20% of Lidl’s product roster is now branded – a list that includes Pepsi, Stella Artois, Fairy Liquid, Carlsberg, Hellmann’s, Knorr Ragù and Robinsons.

Discounters are increasingly recognising the importance of offering big names alongside their private label lines, says Murray Harris, Britvic director of take-home grocery. “As these retailers change strategies to increase their reach, branded suppliers are likely to work with them to help drive value into their category,” he adds.

Only Aldi has stuck to its hard discounter guns, stocking just 11 brands, it claims. Its focus, it says, is to build a strong reputation for its own label, including its Specially Selected premium range.

This doesn’t preclude more own-label suppliers targeting it or the other discounters, of course, especially now premium ranges such as Specially Selected (Aldi) and Simply Irresistible (Netto) are par for the course.

The latest IGD Discount Barometer reveals that 81% of suppliers believe the discount channel will become more important for their business going forward and that 70% think relationships with the discounters have improved over the past two years, with a noticeable improvement in the number of SKUs listed. Stronger ranges, particularly in the key areas of fresh and chilled, are creating opportunities for a broader range of suppliers to trade with the discounters, adds IGD.

Some suppliers nevertheless remain uneasy about supplying the discounters for fear of alienating the big four. The concern is that the multiples will react angrily if they suspect a discounter is getting more favourable terms.

They needn’t be so worried, according to one buyer. “Discounters are often not able to sell brands for a great deal cheaper than their rivals,” he insists, “though some still cut corners through buying the product from foreign wholesalers.” If the price points are lower at the discounters, it’s six of one and half a dozen of the other when the heavy promotional tactics of the multiples are taken into account.

Some suppliers, especially branded, will always feel the multiples offer greater value in terms of merchandising and PoS materials.

But as the discounters’ appeal grows, so too will the opportunities for suppliers.