The rise of the discounters threatens c-stores and off-licences as much as supermarkets, according to a new report.
The survey, carried out this summer by retail consultancy Him!, revealed that shoppers are visiting discounters twice a week – the same frequency as supermarkets – and 24% plan to spend more there in the next 12 months. They are doing so because they believe they save 25% when compared with shopping at the big four.
But while 45% said discounters supplied all their regular shopping, the majority are using them as alternative to c-stores, with two thirds using the discounters for top-up shopping, with milk, bread/bakery, fruit and veg the most important items.
And with an average basket size of 10 items – three times the average at The Co-op – they are looking to increase their spend, with core convenience items, as opposed to ambient grocery brands, ranking top of the list of most wanted items.
A regular supply of milk (wanted by 56%), ATMs (47%), bread baked in store (45%), newspapers (44%), lottery (42%), food-to-go (32%), mobile top-ups (28%) and tobacco (22%) were the most important products and services. Thirty nine per cent also wanted to see more major brands.
Netto is already trialling ATMs, tobacco and mobile top-ups as discounters’ sales have shot up. In the past year Aldi’s market share rose 20% and Lidl’s 14%. Discounter Report 2008, a survey of 1,773 shoppers at Aldi, Lidl, Netto and Iceland, also revealed only 7% of shoppers in discounters converted in the past year while 25% have increased the amount spent there. This suggests many more shoppers could yet be converted if the credit crunch worsens and discount store numbers grow.
The survey also showed some 45% felt BWS was better than at off-licences while 40% felt it was better than supermarkets’. “The whole grocery industry needs to look over its shoulder,” said Tom Fender, director of Him! “We’ve heard about their growth in the past six months but their success is down to organic sales increases. There could be accelerated growth in the next 24 months as they attract new customers.”
However the prospect of c-stores losing out was dismissed by ACS public affairs director Shane Brennan. “Consumers are being more discerning about where they shop but c-stores can still compete as long as they react to shopper needs.”
One wholesaler that has recognised the threat to indies is Booker. It launched the Euro Shopper economy range last year to help retailers meet the discounter challenge, with lines that provide a 30% margin for retailers.
Tesco said it was trialling a Cash Savers range in Ireland to battle Lidl and Aldi. It is understood it is considering bringing the tactic to the UK. A spokesman added: “We’ve extended the Value range while cutting prices on hundreds of lines, delivering a saving to customers of £620m since March.”
And an Asda spokesman said: “We are taking customers away from all discounters with our low prices and 50p promotions.” For three months now, Asda has been running 50p offers on a few fresh items once a month.
The survey, carried out this summer by retail consultancy Him!, revealed that shoppers are visiting discounters twice a week – the same frequency as supermarkets – and 24% plan to spend more there in the next 12 months. They are doing so because they believe they save 25% when compared with shopping at the big four.
But while 45% said discounters supplied all their regular shopping, the majority are using them as alternative to c-stores, with two thirds using the discounters for top-up shopping, with milk, bread/bakery, fruit and veg the most important items.
And with an average basket size of 10 items – three times the average at The Co-op – they are looking to increase their spend, with core convenience items, as opposed to ambient grocery brands, ranking top of the list of most wanted items.
A regular supply of milk (wanted by 56%), ATMs (47%), bread baked in store (45%), newspapers (44%), lottery (42%), food-to-go (32%), mobile top-ups (28%) and tobacco (22%) were the most important products and services. Thirty nine per cent also wanted to see more major brands.
Netto is already trialling ATMs, tobacco and mobile top-ups as discounters’ sales have shot up. In the past year Aldi’s market share rose 20% and Lidl’s 14%. Discounter Report 2008, a survey of 1,773 shoppers at Aldi, Lidl, Netto and Iceland, also revealed only 7% of shoppers in discounters converted in the past year while 25% have increased the amount spent there. This suggests many more shoppers could yet be converted if the credit crunch worsens and discount store numbers grow.
The survey also showed some 45% felt BWS was better than at off-licences while 40% felt it was better than supermarkets’. “The whole grocery industry needs to look over its shoulder,” said Tom Fender, director of Him! “We’ve heard about their growth in the past six months but their success is down to organic sales increases. There could be accelerated growth in the next 24 months as they attract new customers.”
However the prospect of c-stores losing out was dismissed by ACS public affairs director Shane Brennan. “Consumers are being more discerning about where they shop but c-stores can still compete as long as they react to shopper needs.”
One wholesaler that has recognised the threat to indies is Booker. It launched the Euro Shopper economy range last year to help retailers meet the discounter challenge, with lines that provide a 30% margin for retailers.
Tesco said it was trialling a Cash Savers range in Ireland to battle Lidl and Aldi. It is understood it is considering bringing the tactic to the UK. A spokesman added: “We’ve extended the Value range while cutting prices on hundreds of lines, delivering a saving to customers of £620m since March.”
And an Asda spokesman said: “We are taking customers away from all discounters with our low prices and 50p promotions.” For three months now, Asda has been running 50p offers on a few fresh items once a month.
No comments yet