The UK incumbent is struggling to compete in part because of the scale of the two relative newcomers, which between them have a presence in more than 30 countries, including the United States, where Aldi is particularly thriving.
The size of the discounters guarantees better terms when negotiating supplier deals, while they are also able to take a long-term view on profit because they are privately owned and don’t have to worry about shareholder returns or stock prices. does not happen.
Discounters hold more than a third of the supermarket sector in countries such as Germany, Poland, Denmark and Norway and the British shopping landscape is likely to follow suit.
“Britain will be the model for many European countries,” Leigh Sparks, professor of retail studies at the University of Stirling in Scotland, told Reuters.
According to researcher Kantar, Aldi UK, owned by Aldi Sud, is now Britain’s fourth largest grocery company with a market share of 9.2%, while Schwarz Group’s Lidl is the sixth largest with 7.1%.
price pressure
Tesco and Sainsbury’s have already responded by removing in-store meat, fish and deli counters and replacing large numbers of check-out staff with various forms of automation.
This reflects lessons learned during the 2008 financial crisis when Aldi and Lidl gained a foothold in the UK by doing a better job of reducing prices for most of their own brand products to 2,000 compared to 30,000–40,000 in large supermarkets.
With the UK on the verge of recession, and food price inflation above 15%, the traditional players are struggling this time. While the price difference with discounters remains material – at 14-18% for a 45 item shopping basket according to what? – It has narrowed in recent years.