Retail: Discounters to expand

Discounter chains Aldi and Lidl are set for strong growth, according to a new study produced by Allegra Strategies.

The report expects the channel to ultimately capture 10% of the total UK grocery business (currently it commands approximately 5%), and anticipates that the total number of stores operated by the two chains will grow from 700 to 1,100 by 2010. These ambitious predictions suggest that total Aldi and Lidl sales will grow 86% to £5.6 billion.

Allegra argues that the discount chains seriously miscalculated when they first hit the UK market in the early 1990s, underestimating the strength of the indigenous chains and communicating poorly with consumers.

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However, they are now set to benefit from the growing trend of “schizophrenic shoppers”, who are comfortable combining both budget and luxurious shopping (the sort of consumers who fly EasyJet to their five-star villa in Nice).

© db September 2006