Aldi and Lidl set sights on the high street
FAST-GROWING supermarkets Aldi and Lidl are taking their battle with the big four UK grocers to the high street, it emerged yesterday.
Having already wrestled shares of the market from Asda, Morrisons, Sainsbury’s, and Tesco, the German supermarkets are now preparing to launch rival convenience outlets to take on Tesco Metro and Sainsbury’s Local stores.
After recent trials, the discounters are busily snapping up sites in London before embarking on a UK-wide roll out.
Just days after it announced it is soon to create 35,000 new jobs, Aldi is searching for two types of new convenience store across London as part of a £600million development drive.
According to the trade magazine Property Week, the high street Aldi City Store will be around 6,000 sq ft, while the group’s ‘compromise store’ will be between 10,000 sq ft and 14,000 sq ft.
Aldi Christmas Advert 2014 - Everyone’s coming to us this Christmas
Aldi has a huge appetite to expand in London where affluent middle class shoppers are flocking to their stores
Aldi has opened a trial City Store in Kilburn, north London, last year and is now looking for stores across the capital, with four more sites expected to be signed up in the next few weeks, and at least another 10 in 2015.
Cormac McNabb, managing director of Aldi’s property advisors Stripe Street, said: “Aldi has a huge appetite to expand in London where affluent middle class shoppers are flocking to their stores. We expect to exchange on four new stores this side of Christmas.”
Fellow retailer Lidl is also competing head-on with Aldi by rolling out its new town centre brand. It has beaten off competition from Waitrose to transform a 7,500 sq ft former Co-operative store in Kentish Town, north London, into the first of its new smaller outlets.
Lidl, which deals with property acquisitions and leasing in-house, is targeting sites from around 4,000 sq ft for its high street stores.
According to Property Week, Asda, the UK’s second biggest supermarket, is also entering the convenience store sector and has instructed retail agents McMullen Wilson to acquire sites between 6,000 sq ft and 14,000 sq ft for its first entry onto British high street.
Harper Dennis Hobbs retail analyst Jonathan De Mello said: “The supermarket space race is moving from the huge superstore to the high street. Discount retailers Lidl and Aldi have already eaten into the big four supermarkets’ share as shoppers have changed their habits from buying the big weekly shop in one store. The discounters are perceived to offer quality, as well as value now.
“Having hurt the likes of Tesco and Sainsbury’s in the big stores, the discounters will now impact them in the high street with their new convenience stores. It’s going to make life even tougher for the big four.”
Aldi and Lidl have upped the pressure on the big supermarkets as shoppers have increasingly sought out the grocers’ low prices and award-winning products.
The latest grocery share figures from Kantar Worldpanel for the 12 weeks ending 14 September 2014 show Tesco sales are down 4.5 per cent, leaving its market share at 28.8 per cent from 30.2 per cent.
Sainsbury’s market share has slipped from 16.6 per cent to 16.2 per cent of the market, while Aldi and Lidl now account for 4.8 per cent and 3.5 per cent of the market respectively. Aldi recorded a sales increase of 29.1 per cent on the same period last year; Lidl sales rose 17.7 per cent.
Morrisons sales were down 1.3 per cent on last year, while its market share edged down to 10.9 per cent. Asda recorded the best results among the big four, with a 0.8 per cent uplift in sales and a 0.1 per cent increase in market share to 17.4 per cent.
