Reports claim Discount stores are growing faster than supermarkets in the UK
Discount stores are the heartthrobs of modern day UK shoppers! Let us start by throwing in some numbers, to assert our claim:
- Local Data Company (LDC) found that discount stores have grown by an exponential rate of 52% over the last five years, the growth rate of supermarkets in the same period remained at 33%.
- The same study disclosed that 1,487 discount store websites were opened between 2010-15.
- A comparative analysis in 2015 found that the growth of discount stores was three times faster than supermarkets.
As per the shopping folklore, middle class shoppers always preferred Marks and Spencer, the upper-middle class chose the Waitrose and lower-middle class of Britain had a special liking for Morrisons. But all that has changed, with the emergence of discount stores! The Big Four of UK's retail business - Asda, Tesco, Morrisons and Sainsbury's are reeling under the intense competition posed by the discount stores. The German duo of Aldi and Lidl have emerged as the fastest growing names among the discount stores in the UK. Both of them showed staggering growth rates at 17.3% and 16% respectively. But there are many other names which are also cropping up, Clearance King being one of them.
The analysts are already delving deep to find some sane reasons to this drastic paradigm shift from supermarkets to the discount stores. One of the reasons might be the adoption of online shopping among the tech savvy Brits. With its vast advantages, Britons are now ordering for their essentials online, shunning the habit of physical store visits. And when it comes to online shopping, product prices matter more than the variety of brands. The slice of profit for online sales is smaller in proportion. And this scenario suits the discount stores perfectly. While the supermarkets are losing their profit making capacity!
Second reason for such an overwhelming popularity of discount stores could be their choices. Rather than flooding the shoppers with hundreds of brands, these stores are packing their inventory with items that meet the cheap price tag as well as offer quality to the end users. Modern day shoppers stay satisfied with copycat versions of Belgian chocolates, high street lines as long as it brings their shopping costs down! The discount stores have read the minds of the shoppers perfectly and trimmed the expensive brands (from their catalogue) which do not sell.
Many experts believe that the model of discount stores has similarities with the budget airlines model (offered by EasyJet and Ryanair). Their art is: "to take out all the things that are not absolutely required by the passengers, saving costs and passing these on in the form of lower prices to the customer. At the same time, because the prices are lower they increase capacity utilization." From cheap electrical goods, books to general groceries each item costs less at the discount stores and that makes life so much simpler for every shopper out there!
While Morrisons was forced to close 11 stores, Sainsbury’s reported a loss of 1.2% of its revenues, here we are at Clearance King exploring new markets and adding hundreds of new customers each month!