New research into how the UK’s shoppers are interacting with discounters has been launched today by Shoppercentric, a leading independent shopper research agency. The report, entitled: “WindowOn…The Rise of the Discounters” surveyed more than 1,000 UK shoppers aged 18+ on their usage of these types of stores and provides insight on why the middle ground supermarkets need to watch out.
“Whilst the British economy appears to be off the critical list, UK shoppers are very much still feeling the pinch,” said Danielle Pinnington, Managing Director at Shoppercentric. “Our research reveals that 78 percent of shoppers have been adversely affected by the current economic environment, whether as a result of falling income or higher household costs. And it’s not just the less affluent who are experiencing this. As a result discounters are attracting a whole new customer base. But do we expect this to change when shoppers have more to spend? We doubt it, shoppers appear to have changed their spending habits for good.”
• Stores that shoppers consider to be a discounter:
o Top of the list is Poundland (80 percent), followed by 99p Store (75 percent) and PoundWorld with 64 percent.
o In the middle ground is Aldi with 52 percent and Lidl, 49 percent.
o Further down the line is Savers (37 percent), B&M (34 percent), Iceland (30 percent) and Wilkinsons (29 percent).
• Discounters usage:
o 95 percent of all shoppers are familiar with and have access to at least one “discounter”. Of these, 97 percent have bought from one and 88 percent claim to visit one regularly.
o 63 percent of shoppers agreed that they shop at a discounter more than they used to. In contrast, 32 percent said that they’re visiting the major supermarkets less nowadays.
o Discounters are now serious contenders to meet regular grocery shopping needs – Aldi and Lidl are considered by 44 and 31 percent of shoppers respectively as good replacements for supermarkets. 39 percent of shoppers also considered both of these stores good for regular top-up shopping.
o The main reason respondents cited for shopping in discounters more, was the need to reduce shopping bills (67 percent). Great prices and better deals than the supermarkets came next with 47 percent.
o Interestingly shoppers also said that they shopped in discounters more due to improvements in the range and quality of products (40 and 36 percent respectively). 22 percent also said that the stores were nicer than they used to be.
o 31 percent of shoppers also admitted that they think that shopping in discounters is more fun than in regular supermarkets
o In terms of products, 55 percent of shoppers said that they aren’t as loyal to well-known brands as they used to be and 47 percent like the fact that they can find goods at a discounter that they can’t elsewhere.
• Price awareness and a desire to save:
o 77 percent of all shoppers claim they are more aware of prices than they used to be and 70 percent say that they shop wherever the best prices are.
o 76 percent of UK shoppers think it makes sense to shop in discounters and 69 percent like the reliability of constant low prices, rather than deal-spotting in mainstream channels.
o In terms of shopping around, 60 percent split their grocery shopping across stores. In contrast, just 17 percent claim that they can’t be bothered to visit multiple stores to get the better deals.
• Shop smart and stigma free?
o 51 percent of ABC1 shoppers questioned said they have started to use discounters that they didn’t before, compared with 46 percent of C2DE shoppers.
o 57 percent of respondents said that they ‘love to hunt for bargains whether money is tight or not’, with very little difference in results according to social grade: 54 percent of ABC1s agreed versus 60 percent of C2DEs.
o Only 22 percent claim that they don’t like shopping at a discounter but do it just for the savings.
o A mere 14 percent of shoppers would rather not be spotted shopping in a discounter (but this rises to 28 percent for 18-24 year olds and 25 percent of 25-34 year olds).
o 59 percent of shoppers with a household income over £50K claim to go wherever the best prices are – and roughly one in three of them are shopping regularly in Aldi and Lidl respectively.
• Marketing influences to visit a discounter:
o Word of mouth is a key influencer to driving footfall for discounters. 43 percent of shoppers have been encouraged to visit because of a personal recommendation.
o 36 percent of shoppers have visited as a result of curiosity about a new or refurbished store.
o 34 percent have been influenced to visit by leaflets, 20 percent by television advertising and 11 percent by adverts in the media.
“We’ve all known about savvy shopping for years and discounters have picked up on this zeitgeist with great effect. But to deny the depth of their proposition – beyond rock bottom prices for cash-strapped shoppers – is to do discounters a great disservice,” said Pinnington. “This is clever retailing which appeals to a wide audience: so competitors should under-estimate them at their peril.”
She concluded: “We’re not however, saying that discounters have got the market all sewn up – there’s still a lot of work to do especially around the quality message and there will always be shoppers who dislike the typical discounter environment and prefer to spend elsewhere. Discounters will need to be at the top of their game to continue to impose themselves on our retail landscape over the long term.”
About the research
This edition of WindowOn is based on quantitative research among adult shoppers. This included 1,000 online interviews among shoppers aged 18+. Nationally representative quotas were placed on gender, age, social grade and geography.
Shoppercentric is an independent agency specialising in shopper research, providing brand owners and retailers with the perspective that drives shopper marketing and retail strategies. It was established in 2004 and works with clients ranging from Cadbury to Wickes.