Thank Goodness for the Discounters
Where would we be without the discounters Aldi and Lidl? Paying a load more for our groceries that’s for sure. Tesco and Sainsbury’s Aldi price matching schemes are saving consumers a ton of money and I wonder what the typical shopping basket would be without them. Appreciably higher. Sainsbury’s own point of sale advertising states “100s of prices matched to Aldi”. Matching or lower. The discounters are doing a brilliant job of anchoring down prices directly or indirectly for millions of British consumers. They also happen to run excellent stores, support UK food producers and are gaining market share. On current trajectories, Aldi will soon overhaul the basket case that is Asda on market share.
I totally understand the major multiples trying to neutralise the effect of the discounters and it appears to be working with sales growth holding up. The consumer is benefiting but isn’t it an indictment that the supermarkets have had to resort to this? ?What does it say about their true pricing proposition and attitude to offering consumers great value? And now the stakes have been raised even higher with Sainsbury’s extending their Aldi price match to their convenience estate and Tesco responding with 200 prices lowered in their Express stores – as reported in The Grocer on 22nd November. ?Seen as a bit of a cash cow by the grocery industry, this is the first time that the convenience sector has experienced direct exposure to price cutting and the consequences will be profound. Independent stores, already struggling to hold onto market share will undoubtedly experience sales declines and margin erosion. As a result, many of the food and drink wholesalers will suffer sales reductions. Suppliers should be asked to take up some of burden, and this will test the capability of the wholesaler buyers. Let’s be clear. It is the wholesalers’ job to protect and look out for the independent retailers.
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Times are tough for British Consumers. With insurance companies and utilities (to name but two) pushing up prices, food shoppers need a price champion. That used to be Asda, but the fire has gone out. The need for profit to service their debt pile has put paid to that. The discounters are now the shoppers’ champion. They are coming through for everyone.? It will be fascinating to see how this all plays out. Independent stores and wholesalers will feel the pressure. Consumers will be the big winners. Thank goodness for the discounters. The punk rockers of the grocery industry.
David Gilroy ? 2024
Managing Director at TWC
3 个月Always on point David Gilroy. We have been talking a lot at TWC about the importance of wholesaler fascias to drive store standards and move consumers beyond price. Someone on the high street (or retail park) will always be cheaper. On a recent price audit, we found Aldi was 77% cheaper on 72 skus we reviewed versus Indes.
Business Consultant & Managing Director
3 个月The independents in my area are continuing to multiply. In the form of new stores or upgrades. The Parfetts team are doing a great job out there. And also seeing Premier making strides in the Liverpool area, something I never seen during my C&C days. And with Dhameca up and running in Liverpool there is a very competitive wholesale sector for the independents to choose from.
Catering for professionals Sylvester Keal
3 个月Always spot on David -
Head Of Trading
3 个月Good read as always David. You have not referenced the cost of running a convenience business in a managed estate. All may not be over for independents, having a family business has an advantage and can offer a place for brands not stocked at the mults, and discounters with restricted ranges.
CEO at The Westbourne Drinks Company - The Duppy Share
3 个月Bad news for independent stores, and not great for independent brands either… selling into grocery has always been mainly for the scaled brands and massive producers, and the window indie brands selling profitably into retail is getting ever narrower. On many lines we are perhaps already past the point on price where the product can be made to be delicious and nutritious and safe to consume. Consumers might win in the short term with lower prices, then brands respond with lower quality products to be able to make money, so does the consumer actually win?