A report from location analyst CACI pinpoints London and the Southeast as presenting the greatest opportunity for discount retailers.
The survey states that discount retailers currently have relatively few shops in the region while many of their target shoppers live in the area.
CACI identifies 959 new locations across the UK that could successfully support a discount retailer and says that if discounters move to capitalise on these opportunities by opening new stores, all of the major supermarkets stand to lose business.
Paul Langston, associate director for location strategy at CACI, said that Tesco had responded swiftly to rise of the discounters, but added: "Sainsbury's response so far appears limited in the face of this new threat. No long can the so-called discounters be classed as fringe players in the grocery market."
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