Unfaithful shoppers – discount stores and supermarkets

Like-for-like FMCG volume sales have been dropping for five consecutive months in the United Kingdom. For instance in January 2016 sales were 0.8 percent lower than in January 2015; value sales decreased by 0.6 percent. According to Mike Watkins, senior manager of retailer services with Nielsen UK, half of British consumers have changed their spending habits in order to save money. What is more, they visit more shops than before but purchase less.

If we compare the sales trends of the top 10 British supermarkets, we can see that Asda’s sales fell the most, by 4.4 percent from one November-January period to another. At the same time Aldi’s sales grew by 18.7 percent and Lidl’s sales performance improved by 17.2 percent. Thanks to this discount stores’ market share grew to 11 percent. From total sales the proportion of those realised in promotion went below 31 percent.

Mr Watkins reckons that the biggest challenge ahead of retailers is to differentiate themselves from competitors. They need to convince shoppers to return to them and spend more. This is the direction supermarkets need to take – Aldi and Lidl already did this very efficiently in the last two years.