Discount supermarkets expanding faster than ‘big four’

Budget supermarkets opened 1,487 units across the UK during the past five years - a 52 per cent rise. Picture: Greg Macvean
Share this article

Discount retailers such as Aldi and Lidl are expanding at a far faster rate than their mainstream supermarket rivals, a report has revealed.

Budget supermarkets opened 1,487 units across the UK during the past five years - a 52 per cent rise - compared to just 570 units opened by the major brands such as Tesco and Asda, according to a report published by The Local Data Company.

Meanwhile, Scottish towns have the most competition between retailers in the UK, with 88 per cent of the towns analysed in Scotland having above average competition levels - areas with a high number of supermarket and discount stores compared to the population.

Matthew Hopkinson, director at The Local Data Company, said: “This analysis of the rise and increasingly fall of the supermarkets and discounters over the last five years clearly illustrates the fierce competition and the resulting decline in sales that the big four supermarkets have experienced.

“Poundland’s acquisition of 99p Stores was the first sign of any consolidation within the discounter market which has shown explosive growth at 52 per cent over the last five years.

“The result has been not only the closure of supermarkets but most recently some discounters have also closed some stores of which Poundstrecher is an example. Overall, the discounter march continues.””

Leigh Sparks, professor of retail studies at Stirling University, said: “There has been phenomenal growth in discount retailers, both in food and non-food.

“The evidence in the food sector is pointing to continued growth in the likes of Aldi and Lidl, more than the competition.

“However, they have very big plans and the question is if by 2020-21 the market will accommodate these plans.”

Across the UK, 22 towns saw a net decrease in discount stores in 2015, which the report said suggests saturation point for budget retailers has been reached ion these areas.

More from Business