>>discounters are up against world class operators in the UK
The hard discounters have had a pretty tough time since arriving in the UK, something Netto boss Claus Wædeled acknowledges in his first interview since taking charge of the Danish retailer’s operation in this country.
But, as you will have read on page four, Wædeled believes there is plenty of scope to grow his business, particularly as consumers are readily embracing the discounter concept in other areas of life. “Netto is what EasyJet is for the flight industry,” he tells us. I like that analogy, and think the same could be said of Aldi and Lidl. Of course, there’s an important difference. In the airline sector, EasyJet found itself competing against complacent, poorly managed rivals who regularly over-charged and under-delivered. In food retail, the hard discounters have found themselves competing against some of the best operators in the world who have been able to out-think, out-manoeuvre and out-fight the foreign invaders. They have struggled to get off the ground.
Things are very different across the water in Ireland where a new report suggests Aldi and Lidl could take a 15% share of the Republic’s grocery market within five years (see page 8). They are, if you like, doing a Ryanair and exploiting their relative strengths to great effect - such as opening small stores, often in small towns; doing a great job at marketing their weekly specials; and selling product ranges that are cheap because they are sourced globally and get round any below-cost selling rules.
So will the hard discounters ever be able to soar in the UK? I don’t think so, largely because they will always struggle to find any relative strengths to exploit, which means they will forever remain at the fringes of our market. Like EasyJet, they offer some great products at low prices. But, just like the low cost airlines, the hard discounters also offer a no frills experience. As far as UK food retailing is concerned, that’s never going to be good enough. After all, why should shoppers bother when they can get British Airways quality, service and choice for the same EasyJet prices in their local supermarket?
PS... In last week’s issue we were able to highlight the best own label suppliers in the business. In this issue we turn the spotlight on to manufacturers of branded goods. Again, the results of our exclusive survey are based on feedback from buyers across the industry. Well done to all the suppliers who have come out on top.
Discounters: can they fly?
The hard discounters have had a pretty tough time since arriving in the UK, something Netto boss Claus Wædeled acknowledges in his first interview since taking charge of the Danish retailer’s operation in this country.
But, as you will have read on page four, Wædeled believes there is plenty of scope to grow his business, particularly as consumers are readily embracing the discounter concept in other areas of life. “Netto is what EasyJet is for the flight industry,” he tells us. I like that analogy, and think the same could be said of Aldi and Lidl. Of course, there’s an important difference. In the airline sector, EasyJet found itself competing against complacent, poorly managed rivals who regularly over-charged and under-delivered. In food retail, the hard discounters have found themselves competing against some of the best operators in the world who have been able to out-think, out-manoeuvre and out-fight the foreign invaders. They have struggled to get off the ground.
Things are very different across the water in Ireland where a new report suggests Aldi and Lidl could take a 15% share of the Republic’s grocery market within five years (see page 8). They are, if you like, doing a Ryanair and exploiting their relative strengths to great effect - such as opening small stores, often in small towns; doing a great job at marketing their weekly specials; and selling product ranges that are cheap because they are sourced globally and get round any below-cost selling rules.
So will the hard discounters ever be able to soar in the UK? I don’t think so, largely because they will always struggle to find any relative strengths to exploit, which means they will forever remain at the fringes of our market. Like EasyJet, they offer some great products at low prices. But, just like the low cost airlines, the hard discounters also offer a no frills experience. As far as UK food retailing is concerned, that’s never going to be good enough. After all, why should shoppers bother when they can get British Airways quality, service and choice for the same EasyJet prices in their local supermarket?
PS... In last week’s issue we were able to highlight the best own label suppliers in the business. In this issue we turn the spotlight on to manufacturers of branded goods. Again, the results of our exclusive survey are based on feedback from buyers across the industry. Well done to all the suppliers who have come out on top.
Discounters: can they fly?
No comments yet