For industry whippersnappers the march of the discounters is a very current phenomenon with new milestones being toppled in every data release from Kantar Worldpanel.
Today’s bulletin from the eggheads at Hangar Lane included the news that Lidl has caught up with the upmarket quinoa and free coffee purveyors at Waitrose.
Lidl and Waitrose now share seventh place, with 5.1% of the market each.
This follows previous landmark moments such as Aldi eclipsing the Co-op to take the fifth spot.
If the discounters’ current growth rates are maintained over the next few years, it is certainly reasonable to assume that both Aldi and Lidl will streak ahead of the Co-op.
They could potentially leapfrog Morrisons too, dismantling the big four leadership that we have become accustomed to and instead creating an unfamiliar big five structure.
Indeed, I know that at least two of the current big four are working with the assumption that the discounters will control at least 20% of the market between them by 2020 or shortly thereafter.
Store roll out
With their projected rate of store openings still set to ‘eyewatering’, the discount proposition will be opened up to huge swathes of the population who do not currently have access to the genuinely impressive range and pricing offered by Aldi and Lidl.
“Mark Price memorably set forward the chain’s anti-discount strategy as being everything that the discounters cannot be”
So, that anticipated 20% might end up looking conservative.
Lidl catching up with Waitrose is partly meaningful as former Waitrose boss Mark Price memorably set forward the chain’s anti-discount strategy as being everything that the discounters cannot be.
In fairness, this strategy has been effective.
Asserting high-value offer
Sushi bars, ecommerce, free coffee, concierge services and some gorgeous new stores and remodels have enabled Waitrose to defend their turf pretty well.
That said, they and Marks & Spencer are losing shoppers to the discounters – which reportedly really enjoyed the warm weather in terms of meat sales – proving that no one is immune from the latter’s progress.
“Waitrose and Marks & Spencer are losing shoppers to the discounters – which reportedly enjoyed the warm weather in terms of meat sales”
What the aforementioned whippersnappers might not recall is that we already had a well-developed discount market in the past – most notably in the shape of Kwik Save.
The demise of Kwik Save was a messy and regrettable case of corporate infanticide by its somewhat baffled and accident-prone parent Somerfield.
It is highly unlikely that Aldi or Lidl will be blown off course in a similar fashion, despite some concerns over their recent excesses in terms of assortment and marketing.
There’s a real sense of ‘back to basics’ at Lidl in particular.
While the grocer will probably retain some of the commercially beneficial aspects of the ‘store of the future’ concept and will continue to invest in marketing that embeds them further into communities and into sports and wellness, we might well see them put their heads down for a while.
Prettier stores, heftier marketing welly and slightly friendlier service are all well and good, but the rest of 2017 will see Lidl getting back to its roots – rekindling the discounter DNA that has led to it becoming a virtually unbeatable global powerhouse.