There is no stopping Aldi – or fellow discounter Lidl. Sales in Aldi grew by 36% in the last twelve
weeks, and those in Lidl by 20%. And this in a market which grew by just 1.9%,
the lowest level for 11 years (Kantar Worldpanel).
We know that shoppers like the discounters’ low prices, but
they also like the way they price.
To get value in the “big 4” supermarkets shoppers have to
buy what’s on promotion. Often the products on offer are not the ones that they
want, or the offer is not in a form that they want. Multi buys like buy 3 get
one free, or get the second half price are particularly disliked by shoppers.
Fine if the product in question is not perishable and likely to end up in the
bin, or if it is something that is regularly bought, but too often that is not
the case.
Kantar tells us that 45% of all sales made by the major
supermarkets come from promotional offers, up from around 40%. Compare that
with Aldi where just 3% of sales are on promotion.
So there is the draw for Aldi customers. Having worked out
which products they like they can shop with confidence knowing that the price
will be the same day in and day out. Contrast that with other grocers where prices can be hiked for a while just to be able to drop them later, and shoppers are never sure what might be available on promotion on a particular day.
Morrisons, Asda, and Tesco have cottoned on to this, and
permanently (they claim) lowered prices.
While price is the main reason to go to discounters, the IGD
has done some research on what other aspects shoppers find attractive. Some are
surprised by the quality, some like the speed and ease of shopping, and the
reduced range, others enjoy finding continental brands that are not available
elsewhere. As the IGD says, discounters are moving mainstream. 51% of people have shopped in one in the last month, compared with 41% two years ago and 12% are saying that their main store is a discounter, up from 5%. Hence the worry among traditional grocers and the change in pricing strategy.
1 comment:
So what happens when all the ranges have been cut and prices and qualities have been matched? Where will people shop? Location, parking, convenience ... Innovation? Own label or brand?
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