Report reveals the Continental giants are having a hard time maintaining margins Discounters struggle to boost share in the UK The hard discounters continue to find it tough to make any real headway in the UK grocery market, according to a report from IGD. Its research shows that Aldi, Lidl and Netto now operate a total of 611 stores ­ up from 566 in 2000 ­ giving them a combined sales area of 4.93 million sq ft. Aldi is tops in terms of store numbers ­ operating 246 outlets. But Lidl's 220 stores give it a slightly bigger sales area of just over 2 million sq ft. Netto is still firmly in third place ­ despite reports it is gearing up to double its portfolio through an acquisition and build strategy. With a faster expansion of new store space, Lidl has also overtaken Aldi in terms of market share. However, IGD's data shows that the three continental chains still account for only 2% of the UK grocery market, despite the fact they have had a presence here for more than 10 years. IGD estimates that Aldi's turnover grew by £20m to £925m in 2000, generating operating profit of £24m. Lidl's turnover rose sharply from £710m to £975m year on year, with operating profit of £20m. And Netto's sales were virtually unchanged at £440m. It generated profit of just £12m. The figures show the hard discounters are now generating average operating margins of just 2.5%. Their sales productivity is down year on year at about £10 per sq ft per week ­ compared with the £15 to £20 figure enjoyed by food retailers in general. IGD said: "For the hard discounters, expansion of sales space is having a diluting effect on the productivity of established stores." Its Grocery Retailing 2001 report also says that the three chains face the same threats: the strength of the value offer in the big multiples; the lack of suitable sites; and the likely resurgence of soft discount rival Kwik Save. {{NEWS }}