25% of consumers would switch to Lidl or Aldi

Supermarket branding

The latest survey from the grocery industry analysts IGD has re-affirmed that financial constraints have made more UK households turn to cheap supermarkets.

More than 25% of the respondents say they are likely to use low-price retailers like Lidl and Aldi more often in future and nearly half of the consumers would do so if there were discount supermarkets closer to where they live. At present, 5% of British consumers rely mainly on discount stores for their grocery supplies.

Joanne Denney-Finch, chief executive of research agency IGD, thinks that although currently low-price retailers account for a relatively small percentage of total shopping, there is a tendency for an increase in their market share, with nearly two in three consumers saying they would shop in such supermarkets if their financial situation deteriorates.

Consumers also seem to be changing their attitude towards discount supermarkets, as over 80% of their regular shoppers believe the quality of the products and services have improved recently. Young shoppers and families with teenage children are most likely to shop in such supermarkets.

Earlier this month, research from Kantar Worldpanel revealed that supermarket giants Asda and Tesco have registered a fall in their market shares this year, whereas Aldi became the fastest growing chain, with over 25% growth in just three months.

This also supports recent research that has found that consumers supermarket shopping behaviour is polarised towards premium and discount, leaving little in-between (see our recent post). For niche supermarkets this has been a distinct advantage, and could we be seeing a shift away from Tesco and Sainsbury’s in particular? Store presence is still the biggest factor, although with online grocery shopping predicted to double by 2016 (see our recent post), location may be becoming less of an issue.