Jim Duffy comment: German discounters squaring up to incumbents

It never ceases to amuse me when I shop at Lidl or Aldi, watching the behaviours of shoppers there.

Their stores are no longer utilitarian in appearance and are welcoming, says Duffy. Picture: Contributed.

The one that absolutely tickles me pink is when I see shoppers retrieve a Marks & Spencer shopping bag from their car boot. Perish the thought that the neighbours might find out that they shop at discounter stores. It almost seems like one would be tarred with the same brush as if seen exiting an Edinburgh sauna at night. But for many, shopping habits have changed and these discounter or “challenger” stores provide great quality and real value for money.

About a decade ago, these two usurpers were seen as upstarts in the grocery retail space. They were associated with people who were on the breadline or could not afford to spend money in the bigger supermarkets. Their stores popped up in obscure locations and so long as a Lidl and Aldi did not dare to head into posh suburbs, then all would be well.

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Indeed, only recently in the well-heeled area of Giffnock in the south side of Glasgow, all hell broke loose as one of the dynamic duo – Lidl – had the audacity to set up shop there. The local Wholefoods had shut down and Lidl was moving in. It felt like a day of mourning was declared in the leafy suburb, with many taking to social media citing this new store as “disgraceful”. However, and not surprisingly, many welcomed it as they know it will provide quality and value for money as household budgets get stretched.

Life has moved on for Aldi and Lidl, who have captured a whopping big slice of the grocery market. Their stores are no longer utilitarian in appearance but are welcoming and well-structured. They boast fresh bakeries and artisanal breads with fresh produce, gluten free, wholefoods and health and beauty. Their offering has most certainly moved on from years back, which is reflected in how these brands have been adopted by consumers.

It has taken about four years of really focused commercial efforts for these German budget supermarkets to make their mark against the British “Big Four”. While the likes of Tesco have had mixed fortunes and now Asda and Sainsbury plan to join forces to compete, Aldi and Lidl have been creating accelerated management programmes for staff and opening their new stores aggressively and, more importantly, well.

As Tesco opened huge hypermarket style monoliths that needed lots of footfall to pay for them, these two slid into the gap that was created. A gap their leadership teams knew was widening and lucrative.

So why are many of us still a little bit prissy when it comes to declaring that we shop at either of these two growing and respectable brands? This despite the knowledge that their offerings are top notch and their deals are some of the best in the sector. Like all things in life, it requires a mindset change. Shopping at a discounter may feel a little “cheap” to some of us , even demeaning. Carrying a Lidl “bag for life” may not present that look or image we want to portray and project.

Especially if we take the bag out of the boot of our BMW. While needs must for some to make ends meet, for others, losing the snobbishness around these brands is a hard pill to swallow. But, once taken, it gets a lot easier…

I have no doubt that the good residents of Giffnock will frequent their new store in droves, and very soon they will just love the Lidl centre isle goods, as well as the coleslaw and tinned tuna. They will soon value their local Lidl the same way these stores are cherished on the Continent.

In places like Portugal and Spain, the estate agents are at pains to point out that “you have a Lidl only ten minutes from your new villa”. The mindset there is one of convenience. They already know and appreciate that these two brands are part and part of the regular grocery shopping circuit.

In time, we all will, and the Big Four need to react a lot quicker if they are to survive in their present form.

Jim Duffy is co-founder of Moonshot ­Academy and author of Create Special