Table of Contents
Executive Summary
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- The market
- Discount retail sector growth slows down
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- Figure 1: All discounters’ sector size (ex-VAT), 2014-24
- Food discounters account for 14% of the grocery market
- Companies and brands
- Market leader Aldi delivers £11.3 billion in latest sales
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- Figure 2: Leading discounters’ estimated share of all discount sales, 2018
- Aldi leads as favourite brand
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- Figure 3: Attitudes towards and usage of selected brands, July 2019
- The consumer
- Most of the nation are shopping at discounters
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- Figure 4: Discounters shopped at within the last three months, June 2019
- Discounters appeal to shoppers of all ages
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- Figure 5: Discount shoppers, by age, June 2019
- Number of discount shoppers shopping online grows to 34%
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- Figure 6: Online shoppers at discounters, 2018 and 2019
- Fresh and chilled are key frequency drivers in food discounters
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- Figure 7: Frequency of food purchasing at food discounters, June 2019
- Household and cleaning products most frequently shopped across non-food categories
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- Figure 8: Non-food products purchased at discounters in the last three months, by frequency of purchase, June 2019
- Value for money is the top satisfaction factor amongst discount shoppers
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- Figure 9: Levels of satisfaction among discount shoppers in the last three months, June 2019
- Over half of shoppers describe discounters as a unique and exciting shopping experience
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- Figure 10: Attitudes towards drivers of use, June 2019
- What we think
Issues and Insights
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- Food discounters are becoming increasingly convenient
- The facts
- The implications
- How can non-food discounters ensure that they remain relevant?
- The facts
- The implications
The Market – What You Need to Know
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- Inflation steady in 2019 as real incomes grow
- Consumer confidence picks up
- Discount retail sector growth slows down
- Aldi and Lidl continue to drive the sector
- Growth slows down in non-food discount sector
Market Drivers
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- Food and drink prices unsteady as overall inflation increases marginally in 2019
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- Figure 11: CPIH, monthly percentage change over 12 months, June 2018-June 2019
- Real earnings on the rise
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- Figure 12: Real average weekly earnings (seasonally adjusted), single month % change year-on-year, January 2016-July 2019
- Spending on food and drink behind overall spend in 2018
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- Figure 13: Growth in total and food and drink consumer spending, 2014-18
- Consumer confidence on the up in first half of 2019
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- Figure 14: Consumer confidence tracker, January 2017-May 2019
- Spend in food and non-food retail
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- Figure 15: Annual percentage change in all retail sales, food retailers and non-food retailers, non-seasonally adjusted value series, January 2017-July 2019
Market Size and Forecast
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- Discounter growth slows down
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- Figure 16: All discounters’ sector size (ex-VAT), 2014-24
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- Figure 17: Discount sector size as a percentage of all retail sales (ex-fuel, ex-VAT), 2014-19
- Figure 18: All discounters’ sector size (ex-VAT), detailed forecast at current and constant prices, 2014-24
- The food discount sector
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- Figure 19: Food discount sector size as a percentage of all retail sales (ex-fuel, ex-VAT), 2014-24
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- Figure 20: Food discount sector size (ex-VAT), detailed forecast at current and constant prices, 2014-24
- The non-food discount sector
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- Figure 21: Non-food discount sector size as a percentage of all retail sales (ex-fuel, ex-VAT), 2014-24
- Figure 22: Non-food discount sector size (ex-VAT), detailed forecast at current and constant prices, 2014-24
- Forecast methodology
The Consumer – What You Need to Know
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- Aldi is the most visited discounter
- Discounters are attracting younger consumers
- Over a third of discount shoppers shop online
- Top food discount categories shopped more than once a week by half of shoppers
- Non-food discounters increasingly used to shop electrical products and toys & games
- Discount shoppers least satisfied with product sourcing information
- Speed of shop and checkout options are areas of improvement
Where They Shop
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- A third are shopping at discounters more
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- Figure 23: Discount shopping compared to the last 12 months, June 2019
- Aldi is the UK’s most popular discounter
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- Figure 24: Discounters shopped at within the last three months, June 2019
- Food discounters see most frequent visitation
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- Figure 25: Frequency of discounters visitation in the last three months, June 2019
- Heron Foods and Aldi shoppers visit respective stores most often
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- Figure 26: Frequency of discounters visitation in the last three months, shoppers only rebase, June 2019
- Repertoire of stores visited
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- Figure 27: Repertoire of discounters visited in the last three months, June 2019
Retailer Demographic Comparison
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- Discounters are used by all ages
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- Figure 28: Discount shoppers, by age, June 2019
- Food discounters: most used by 25-34 year olds
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- Figure 29: Food discounters usage in the past three months, by age, June 2019
- Food discounters: Aldi attracts all ages while Lidl has an older demographic
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- Figure 30: Age profile of those who shopped with Aldi and Lidl most often, June 2018 and 2019
- Non-food discounters: attracting more high-income, value-seeking shoppers
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- Figure 31: Non-food discounters usage in the past three months, by household income, June 2019
- Non-food discounters: increasing number of Londoners visiting these stores
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- Figure 32: Non-food discounter usage in the past three months, by region, June 2019
Discounters and Online
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- Aldi is the most used discounter online
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- Figure 33: Online shoppers at discounters, 2018 and 2019
- Almost a third of frequent Aldi shoppers do so online
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- Figure 34: Discounters shopped at online in the past three months, by discount retailers used most often, June 2019
Frequency of Food and Drink Purchases at Food Discounters
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- Fresh and chilled are categories most frequently shopped in food discounters
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- Figure 35: Frequency of food purchasing at food discounters, June 2019
- Alcohol category attracts more shoppers
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- Figure 36: Frequency of food purchasing at Aldi and Lidl, June 2019
- Alcoholic drinks and frozen categories gain more weekly shoppers
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- Figure 37: Frequency of food purchasing at food discounters, by socio-economic group, June 2018 and 2019
Frequency of Non-food Purchasing at Discounters
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- Household and health and beauty products continue to drive spend at non-food discounters
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- Figure 38: Non-food products purchased at discounters in the last three months, by frequency of purchase, June 2019
- Electrical products and toys and games attract more shoppers
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- Figure 39: Non-food purchases in the last three months, June 2018 and 2019
- 25-34 year olds buy non-foods most frequently from discounters
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- Figure 40: Non-food products purchased at discounters in the last three months, by age, June 2019
Satisfaction with Discount Retailers
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- Discount shoppers have an excellent level of satisfaction overall
- Value for money is the top satisfaction factor amongst discount shoppers
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- Figure 41: Levels of satisfaction among discount shoppers in the last three months, June 2019
- Aldi shoppers are the most satisfied
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- Figure 42: Satisfaction of food discount shoppers, by food discounter shopped at most often, June 2019
- Home Bargains shoppers are satisfied across most factors
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- Figure 43: Satisfaction of non-food discount shoppers where they shop the most, June 2019
Key Driver Analysis
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- Discounters to consider ranges and improve ease of checkout
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- Figure 44: Provenance App
- Figure 45: Key drivers of overall satisfaction with discounters, July 2019
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- Figure 46: Overall satisfaction with discounters – Key driver output, July 2019
- Methodology
Attitudes towards Shopping at Discounters
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- A unique shopping experience and driving excitement are key drivers to discount stores
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- Figure 47: Attitudes towards drivers of use, June 2019
- Driving excitement is important in both food and non-food discounters
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- Figure 48: Attitudes towards discounters, by retailer shopped at most often, June 2019
- Food discount shoppers agree that own-brand products are just as good as big brands
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- Figure 49: Attitudes towards food discounters, June 2019
CHAID Analysis – Food and Non-food Discounters
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- Methodology
- Urban Millennial families favour British sourcing
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- Figure 50: Attitudes towards discounters – CHAID – Tree output, July 2019
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- Figure 51: Attitudes towards discounters – CHAID – Table output, July 2019
Leading Retailers – What You Need to Know
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- Aldi leads the discount market with sales over £10 billion
- Food discounters steal more share of the grocery market
- Aldi sets itself apart with strongest brand image
- Homeware and décor biggest overall occupier of shelf space
Leading Retailers – Key Metrics
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- Revenue
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- Figure 52: Leading discounters’ sales, 2014/15-2018/19
- Operating profits and margins
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- Figure 53: Leading discounters’ operating profits, 2014/15-2018/19
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- Figure 54: Leading discounters’ operating margins, 2014/15-2018/19
- Stores and sales per outlet
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- Figure 55: Leading discounters’ outlet numbers, 2014/15-2018/19
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- Figure 56: Leading discounters’ sales per outlet, 2014/15-2018/19
Market Share
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- Food discounters account for almost two thirds of the market
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- Figure 57: Leading discounters’ estimated share of all discount sales, 2018
- Figure 58: Leading 10 discounters’ share of all discount sales, 2014-18
- Food discounters: combined market share of 12.9% in 2018
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- Figure 59: Estimated share of all grocery retail sales (ex-VAT, ex-fuel) by the leading players, 2018
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- Figure 60: Grocery market share: the big four vs the food discounters, 2011-18
- Non-food discounters: driving growth in the mixed goods sector
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- Figure 61: Non-food discounters’ share of all mixed goods retail sales, 2009-18
- Savers: a growing discount player in health and beauty
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- Figure 62: Savers: market share of the specialist health and beauty sector (ex-VAT), 2012-18
Space Allocation Summary
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- Food discounters – Summary
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- Figure 63: Food discounters: summary shelf frontage space allocation estimates, August 2019
- Food discounters – Detailed space allocation
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- Figure 64: Food discounters: detailed shelf frontage space allocation estimates, August 2019
- Non-food discounters – Summary
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- Figure 65: Non-food discounters: summary shelf frontage space allocation estimates, August 2019
- Non-food discounters – Detailed space allocation
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- Figure 66: Non-food discounters: detailed shelf frontage space allocation estimates, August 2019
Retail Product Mix
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- Figure 67: Leading discounters estimated sales mix, 2018
- Figure 68: Leading discounters: estimates sales by product, 2018
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- Figure 69: Leading discounters, estimates sales per square metre, 2018
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Launch Activity and Innovation
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- New UK market entrants
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- Figure 70: Jack’s, April 2019
- Flexing store size
- Targeting on-the-go shoppers with convenience
- Expanding with health and wellness
- Action on plastic
- Driving sales with new online ventures
- Online to offline: Aldi opens new physical stores in China
- German Chatbot LiA
- Discount partnerships
Advertising and Marketing Activity
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- Total advertising spend down 12.4% year-on-year in 2018
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- Figure 71: Total recorded above-the-line, online display and direct mail total advertising expenditure by the UK’s leading discounters, 2014-18
- The food discounters continue to spend the most on advertising
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- Figure 72: UK leading discounters: recorded above-the-line, online display and direct mail total advertising expenditure, 2014-18
- 2018 sees advertising peaks during various seasonal periods
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- Figure 73: Total recorded above-the-line, online display and direct mail total advertising expenditure by UK leading discounters, by month, 2018
- Over half of spend on TV
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- Figure 74: Total recorded above-the-line, online display and direct mail total advertising expenditure by the UK’s leading discounters, by media type, 2014-18
- What we’ve seen in 2019
- Nielsen Ad Intel coverage
Brand Research
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- Brand map
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- Figure 75: Attitudes towards and usage of selected brands, July 2019
- Key brand metrics
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- Figure 76: Key metrics for selected brands, July 2019
- Brand attitudes: Lidl considered most innovative while Poundland leads on value
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- Figure 77: Attitudes, by brand, July 2019
- Brand personality: food discounters considered more ethical and exclusive
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- Figure 78: Brand personality – Macro image, July 2019
- Aldi considered to be aspirational, responsive and cutting edge
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- Figure 79: Brand personality – Micro image, July 2019
Brand Analysis
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- Aldi maintains strong brand image
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- Figure 80: User profile of Aldi, July 2019
- Home Bargains most popular non-food discounter
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- Figure 81: User profile of Home Bargains, July 2019
- B&M most trusted non-food discounter
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- Figure 82: User profile of B&M, July 2019
- Lidl continues to fall behind Aldi despite having highest awareness
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- Figure 83: User profile of Lidl, July 2019
- Poundland offers best value among non-food discounters
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- Figure 84: User profile of Poundland, July 2019
Aldi
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- What we think
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- Figure 85: Aldi Local, Balham
- Background
- Company performance
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- Figure 86: Aldi Stores Ltd (UK & Ireland): group financial performance, 2014-18
- Figure 87: Aldi Stores Ltd (UK & Ireland): outlet data, 2014-18
- Retail offering
Lidl
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- What we think
- Background
- Company performance
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- Figure 88: Lidl (UK): group financial performance, 2014/15-2018/19
- Figure 89: Lidl (UK): Outlet data, 2014/15-2018/19
- Retail offering
B&M
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- What we think
- Background
- Company performance
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- Figure 90: B&M Retail Ltd: group financial performance, 2014/15-2018/19
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- Figure 91: B&M Retail Ltd: outlet data, 2014/15-2018/19
- Retail offering
Home Bargains
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- What we think
- Background
- Company performance
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- Figure 92: TJ Morris Ltd: group financial performance, 2014/15-2018/19
- Figure 93: TJ Morris Ltd: outlet data, 2014/15-2018/19
- Retail offering
Poundland
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- What we think
- Background
- Company performance
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- Figure 94: Poundland Group: group financial performance, 2014/15-2018/19
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- Figure 95: Poundland Group: outlet data, 2014/15-2018/19
- Retail offering
Wilko
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- What we think
- Background
- Company performance
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- Figure 96: Wilko: group financial performance, 2014/15-2018/19
- Figure 97: Wilko: outlet data, 2014/15-2018/19
- Retail offering
Appendix – Data Sources, Abbreviations and Supporting Information
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- Data sources
- VAT
- Financial definitions
- Abbreviations
- Consumer research methodology
Appendix – Market Size and Forecast
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- Forecast methodology
Appendix – Key Driver Analysis
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- Interpretation of results
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- Figure 98: Overall satisfaction with discounters – Key driver output, July 2019
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- Figure 99: Satisfaction with discounters, July 2019
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