From weekly shoppers to bargain hunters, everyone has a favourite approach when it comes to the supermarket shop, but it seems our shopping habits are subject to change as the ‘big four’ come under threat.

This week has seen Tesco back in the news, reporting further losses. At the other end of the scale, Aldi’s market share seems to be ever-growing as they go head to head with middle-class favourite Waitrose.

So, what are they doing so differently?

It’s widely reported that some of Tesco’s losses can be attributed to consumers gravitating towards the ‘no-frills’ propositions of the discount supermarkets.

Conversely, Aldi’s strategy has resulted in what can only be described as a continual rate of success and Lidl is following in its footsteps as they become the fastest growing food retailers in the UK. They have successfully established their value proposition and  taken on the UK’s biggest supermarket chains, resulting in shop prices being dragged down as the big names try to compete.

Their brand strategy is transparent; Aldi’s advertising campaign takes the products of competitors and compares them like for like with its cheaper, unbranded offering. Similarly, Lidl has invested a firm £20million in its brand strategy, which involves a new TV campaign #LidlSurprises. The advert compares Lidl’s products to those you’d find at a local farmer’s market, emphasising the high standard of its produce.

Both retailers are using their campaigns to highlight their quality proposition. . With new offerings of Bordeaux wine, and Lidl’s recent launch of a clothing range, they’re offering the same variety of products as the top food retailers, but at a fraction of the price. Low costs attract shoppers, but good quality keeps them coming back.

Shopping Habits

The rise of the discount supermarket isn’t the only factor influencing  change. We are also shopping in a different way, such as the increase in ‘savvy shoppers’ and the growing popularity of the ‘top-up shop’.

Increasingly busy lifestyles have driven popularity of the ‘top-up shop’, which has meant a drop in the frequency of supermarket visits as we head to local convenience stores to pick up essentials whenever and wherever we can.

We’ve also become accustomed to tightening our purse strings – the savvy shopper is here to stay and the discount supermarkets are catering to a gap in the market. No longer are shoppers picking up special offers from the likes of Asda, Sainsbury’s, Morrisons and Tesco, they’re beginning to miss them out altogether.

The Future

Retailers need to motivate shoppers to act, they need to actively engage with consumers. The supermarkets taking the lead know who they are targeting, they have a clear idea of their brand positioning and they have the marketing strategy to back it up. In order to remain relevant, food retailers need to offer consumers something unique as quality is no longer sacrificed with low costs. Competition is rife, and it has become more crucial than ever for retailers to continually adapt in an ever changing market.

Sainsbury’s have already begun their shift into the discount market and it seems that they’re going for the ‘if you can’t beat them, join them’ approach. Rather than adapting their own brand offering, they’ve recently teamed up with Netto. With intentions of relaunching the Danish discount chain in the UK, have they found a solution or are they further fuelling the rise of the discount supermarket?

To find out more about our brand strategy work, please get in touch.

 

Sarah Pyatt

Account Executive