Take a walk down any UK high street and you’ll be greeted with an abundance of stores focusing on low-cost goods. Over the last decade such shops have grown in influence, and according to latest data, it seems they are only going to become more plentiful and dominant in the coming years.
GlobalData, widely regarded as the world leader in business analytics, has suggested that by 2022, the UK discount retail market will grow by a staggering 36.1 per cent by 2022. Should that occur, the sector will be worth an estimated £32.5bn within the next five years.
The three stores that currently dominate this particular market – Aldi, Lidl and B&M Bargains – are expected to gobble up more of the sector, which could mean the three outlets combined end up with a combined market share of around 75 per cent within the next half decade.
The results were commented on by Molly Johnson-Jones, senior food & grocery analyst from GlobalData Retail.
“Our report findings confirm that discounters have done an exceptional job in gaining market share of frequently purchased items by changing the perception of discounter own label products in F&G while at the same time undercutting mainstream retailers on branded items in H&B and household. This combined approach has proven to be very disruptive in the market and has contributed to their success.
“Food and grocery has enjoyed strong growth over the past decade as even when incomes have been more pressured by inflation and lower real wage growth, people still need to buy the same amount of food. The F&G discounters have taken advantage of this by extending their range to cater for all consumer needs and growing their premium and fresh ranges to ensure that they can be a one-stop-shop for the weekly shop.”
A UK staple
GlobalData’s research also found that almost nine in 10 UK adults (89.4 per cent) have shopped at a discount retail outlet in the last 12 months. And, though these purchases tend to be small items – light bulbs or soaps, for example – consumers tend to return regularly because of the associated cost and convenience.
It has been suggested that, because of Brexit uncertainty and a number of other economic factors, consumers are likely to implement ‘fewer and smaller upgrades on their homes’ within the next five years, which is a factor that will likely play into the hands of affordable discount retailers.
Lidl by DuurzaamBedrijfsleven Media licensed under Creative commons 4