Budget stores five-year growth rate overtakes that of supermarkets and convenience stores
A new report has revealed that budget stores such as Aldi and Lidl have grown at a faster rate than supermarkets and convenience stores during the last five years.
Research by The Local Data Company shows that the compound annual growth of rate of Aldi, Lidl, Iceland, 99p Stores, Poundland, Poundstretcher, Poundworld, Home Bargains, B&M Bargains and Farmfoods was 8.2% in the period. This compares to 6% growth for Tesco, Sainsbury’s, Morrisons, Asda and Co-Operative Food.
Meanwhile, convenience stores recorded compound annual growth of 7.6% over the five years.
Analysis of the top four supermarket operators across their supermarket and convenience store formats shows that Tesco had the biggest increase in store numbers with the opening of 1,104 new stores in the period while Asda showed the greatest percentage increase at 77.3%.
The figures also reveal that supermarkets have reduced their net openings significantly from their peak in 2012 of 15.3% to just 2.2% in the year to date. The number of convenience stores has risen by 4% while those of budget stores has increased by 5.6%.
The main supermarket fascia convenience stores had an annual growth rate of 6.7%, which was higher than all other convenience stores.
London Data Company director Matthew Williamson said: “This research clearly shows why the supermarket operators are struggling. This comes not only as a result of deflation and subdued consumer spend but also a massive increase in competition both from outside but also within.
“This is illustrated by the fact that the big 4 supermarkets opened over 500 new stores since 2011 and whilst doing this also opened nearly 2,000 convenience stores. At the same time as this the discounters have increased their store numbers by nearly 1,400 and have a serious alternative to the big four supermarkets both on price and offer.
“So the numbers are significant and reminiscent of a car crash in slow motion and that’s before one includes the symbol groups and the rise of the M&S Simply Food and Waitrose/Little Waitrose, which this research has not included.”
