The inevitable rise of discount chains in the UK

The inevitable rise of discount chains in the UK

The UK’s discount market is set to grow by 36.1 per cent by next year, reaching £32.5 billion, according to GlobalData. The arrival of German discounters Aldi and Lidl in the UK has caused nothing short of chaos for Britain’s largest supermarkets. The Big 4 grocers – Tesco, Asda, Sainsbury’s and Morrisons – have been facing a game-changing threat as Aldi and Lidl cut into their market share with no-frills shopping that is marking a generational shift in retail patterns. In recent years, other discount retailers outside the grocery sector, such as B&M and Poundland, have also presented a threat to established UK chains by expanding their presence. So much so that last year, GlobalData predicted that discounters’ market share would grow 25 per cent by 2024.

Once-loyal customers have deserted the big supermarkets after loyalty schemes, multi-buy promotions and money-off vouchers fell prey to the lure of the permanently low prices offered by discounters.
Discount retail growth has been driven by an increasingly price-sensitive shopper, aggressive space growth from the discounters, improved shopping experience, and growth in product range.
Evidently, the UK’s retail sector presents an attractive market for discounters, as already it boasts discount chains such as Aldi, Lidl, B&M, Savers, and Poundland. However, the sector is in line for a major shake-up, after Russian discount chain Mere recently announced plans to open over 300 stores in the UK within the next eight to 10 years.
Mere plans to undercut Lidl and Aldi by 20 per cent to 30 per cent. It also wants to scale its UK presence once processes have been established. The first four UK stores for Mere will open this year in Preston, Castleford, Caldicot and Mold.
Meanwhile, Poundland attempted to capitalise on its growth during lockdown by opening ...

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