Bargain hunting: why there's a growing pool of discount shoppers

Date : 16 July 2012
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More shoppers than ever before plan to shop at food discounters in a bid to hunt down the best bargains and value, according to our latest ShopperVista research. Here, we look at the discount trends and the reasons behind them.

New and existing shoppers chasing value

The discount channel is growing and our research shows that the highest level to date - 42% of shoppers - claim to have shopped at a food discounter in the last month. That’s up from 35% a year ago.

Not only are people already heading to discounters for their grocery shopping, but almost a third of shoppers (31%) say they will be using discount supermarkets, such as Aldi and Lidl, more this year.

The pool of discounter shoppers has grown

the pool of discounter shoppers has grown

(1) Base: all grocery shoppers, May’11 and May’12

Why are discounters more popular than ever?

Clearly, the tough economic climate is a strong motivation for shoppers to seek out competitive prices and better value groceries. In fact, since the downturn, we’ve seen shoppers using a wider range of channels, from traditional stores to online shops, to find the best value.

The UK was a late adopter of discounters by European standards, but growth in recent years has made up for that. It’s not just shopper attitudes that have changed, the discounters themselves have evolved too.

Discounters are attracting better off families

attracting better off familesThe stigma once attached to discount shopping is eroding as discounters are expanding their shopper appeal. Even better-off shoppers, particularly those with children, are experimenting with discount stores as they feel the squeeze.

In fact, our research suggests that shoppers from better-off families could be a growth driver for discounters – so-called ABC1 shoppers with children from the highest socio-economic group are most likely to use discounters more. Nearly four in ten (39%) of them say they will use discount supermarkets more in the year ahead compared to 30% of C2DEs with children.

A wider range of products on offer

Discount retailers have invested in their product range and this is helping to build customer loyalty as more shoppers say they are using Aldi and Lidl for a larger proportion of their shop. The proportion of shoppers who consider the discounters their main grocery destination has doubled over the last year, from 3% to 6%.

While the products on offer are still relatively limited, Aldi and Lidl have recently invested to extend their ranges and enhance the quality of their products. The discounters have reacted to shopper trends and introduced products that are healthier, organic or locally-sourced, for instance.

wider range of products on offer

(Source: Lidl; IGD Retail Analysis)

Discounters have paid particular attention to improving their fresh produce and enhancing the look and feel of the in-store display. For example, they have widened their product sections, incorporated additional shelving and begun to offer more loose items. Additionally, advertising has played a big part; discounters have showcased the quality and provenance (rather than simply the availability) of their fresh produce and both Aldi and Lidl now draw the shoppers’ attention to local or British products in-store.

All of these factors have helped to increase discounters’ credibility with shoppers and to bring people into their stores.

A growing opportunity

Although food discounters still only represent a relatively small proportion of the overall grocery market, they are growing at a fast pace. We forecast that the channel will be worth £11.4bn by 2016, up from £7bn in 2011.

There is still plenty of room to better tailor future business plans to shoppers’ requirements, but recognising that more shoppers claim to be using discount stores as the destination for their main weekly shopping mission will help to shape discounters’ strategies. And ultimately, that can only be positive for shoppers.