Discounters perform well as mid-range retailers struggle

The latest data on grocery sales in the Uk show good performances for discounters as mid-range grocers are still struggling
Discounters perform well as mid-range retailers struggle

Discounters in the Uk have continued to increase their till roll in the last three months, while mid-range retailers are still struggling to reverse their declining trend.

Among the ‘big four’ Uk grocers, Tesco and Morrisons recorded a 3.8% loss in the 12 weeks to July 20, according to the latest data by Kantar Worldpanel. Minimum growth was seen in sales for Asda and Sainsbury’s (0.9% and 1.2%). Both outlets both have held onto their market shares of 17.0% and 16.6%.

Discounters continue to perform exceptionally well, with Aldi increasing 32.2% in sales compared with the same period last year, and Lidl up 19.5%.

“Aldi’s growth rate has lifted its market share to 4.8%. This is a record for the retailer and means it has nearly caught up with Waitrose on 4.9%,” commented Edward Garner, director at Kantar Worldpanel. “Similarly, Lidl has held onto its record share of 3.6%.

“Waitrose has continued to resist pressure from the competition, testament to its policy of maximum differentiation, and has grown sales by 3.4%”.

Mid-range retailers are still at a loss about how to redress the decline in sales they have been experiencing. Some appear to be trying to cut wherever possible, to reduce their prices. Offers have been prominent in stores in recent months.

Analysts believe that trading down to reach a better competing ground against discounters is an approach that cannot work. Discounters’ entire business model is founded on minimising costs on infrastructures, logistics, display and anything related, to deliver low pricing.

Mid-range retailers cannot do so, for they invested heavily in image, product display, feel and look of their stores, to stand out in the eyes of customers and create an identity. Turning away from that strategy would seem a no-go.

As Sainsbury’s and Asda appear to be – if only slightly – in a better shape, others still have to find a way to avoid further losses.


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