Pi Attitude Zone: Material Status
German Supermarkets Winning Britain’s Supermarket War
Something peculiar has been happening to the UK supermarket business. It has been noticeably “turning German”, and heading down-market.
Giant British grocery store chains like Tesco and Sainsbury used to think their imposing market share, their solidly middle-class image and their “British is best” appeal made them invulnerable to incursions from “cheapo” foreign discount stores. The posh end of the market, represented by upscale chains like Waitrose and Marks & Spencer, for their part thought that their image and reputation for quality would immunize them against “tacky” upstart discounters that could undercut their prices by big margins.
Then along came two immense shifts: the 2008 recession with its lingering after-effects... and a sudden growth spurt from unashamed price-cutter store chains like Lidl and Aldi. These two German retailers, both enormous in continental Europe, started small in Britain. They tended to be shunned at the beginning by shoppers who “wouldn’t be seen dead there”. How quickly things can change.
In a recent survey, over half of all UK households turned out to have been to a discount store. Lidl itself announced that a quarter of all its customers were now from the upper and upper-middle-class socio-economic groups. All of a sudden the “stigma” seems to have disappeared, and the quest for significantly cheaper prices on the weekly shopping basket meant that the previously reticent were no longer embarrassed about their visits to foreign-owned discounters. The year-end sales of Tesco, Asda, Sainsbury's and Morrisons took a sharp dip, and shopping habits seemed to go through a seismic shift down-market.
The fact that this has happened at a time when Britain was nominally emerging from recession makes the change of attitude all the more remarkable. Narrower choice of brands on the discounters’ shelves – one or two brands of bottled water instead of ten, for instance – appeared not to be a disincentive. Far from keeping their visits furtive, shoppers have started bragging about their savings on “perfectly good products”. They have also begun to notice that the fresh produce on offer (meat and vegetables particularly) are sourced from UK suppliers, counter-balancing the imports of German beer and bratwurst.
The result is that these “German upstart” chains are now well on their way to becoming mainstream British retailers in their own right. Both Aldi and Lidl have announced aggressive expansion plans for 2014.
Pi says: for a British nation famously “out of love with Europe”, this looks suspiciously like Europhilia...Zone: Material Status Country: Europe Product – Retail