Opinion: Grocers need to wake up to the threat of B&M

With their funny shops, weird products, quirky ways and cash-only policy, the discount stores were for poor people.

Or they were the baffling supermarkets you visited while on holiday in an ultimately unsuccessful last-ditch attempt to source some brown sauce, fish fingers and Rothmans.

And look at them now. With their giant prawns, balsamic glaze and vegan options; their shiny in-store bakeries and their toilets; their fancy clean floors and expensive TV ads.

Happily do the chattering classes now flock to the discount destinations.

Sure, some of this is a result of the erosion of snobbery and a general fear of the unknown; but a lot of the burgeoning acceptance around Aldi and Lidl is because they have exponentially raised their game in terms of sourcing, ranging, merchandising and service. 

All the while retaining their operating model and their rock-bottom prices.

Secret successes

The inflection point for discounters in the UK was obviously the 2008 financial crisis.

While a similarly cataclysmic inflection point will hopefully not be imminent, I’m beginning to get the sense that another breed of discounters is reaching an equivalent fulcrum in terms of acceptability and accessibility.

It’s long been a source of frustration for me that, while Aldi and Lidl are always the pantomime villains in the narrative around the structural shift in the UK grocery retail market, this version of events excludes some incredibly impressive retailers.

Some – i.e. Costco – are excluded from the story as they are officially not retailers (even though everyone knows that they are really), while others – principally B&M and Home Bargains – are overlooked due to a lack of awareness and because they never show up in market share data.

“A number of very senior supermarket execs have told me that B&M is as much of a pain in the backside as Aldi and that Home Bargains causes as many sleepless nights at Lidl”

A number of very senior supermarket execs have told me that B&M is as much of a pain in the backside as Aldi and that Home Bargains causes as many sleepless nights at Lidl.

For seasonal, confectionery, soft drinks, booze, health & beauty and household to name just a few categories, these retailers are stealing significant amounts of market share and – importantly – an increasing number of shopping trips.

B&M has trialled produce, and is now dallying with chilled and frozen after its acquisition of Heron.

My local Home Bargains has a full run of produce as well as an extensive array of baked goods, a decent chilled range and two chest freezers.

These places are becoming more and more credible destinations for the average grocery shopper and I’m seeing shoppers react incredibly favourably to this evolution, walking out of B&M with full trolleys of groceries that will have previously been bought from supermarkets.

But, hey, they’re not in the market share data, so it’s not really happening.

If only there was a lesson from retail history we could learn.

A lesson about ignoring an everyday low-cost and everyday low-price regional general merchandise discounter that slowly evolved into a national food retailer before single-handedly dismembering the local supermarket industry.

If only…

• Bryan Roberts is global insights director at TCC Global