Why the success of Lidl and Aldi is good news for shoppers

BRITS love a bargain - and the rise of budget retailers Aldi and Lidl is proof of that.

The German shops have gone from strength to strength in recent years, taking a huge slice of the supermarket pie, which had been dominated by the traditional "big four" chains.

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And there's little sign that shoppers' love-affair with the discounters is going to stop anytime soon.

Last year Aldi overtook the Co-op to become the UK's fifth biggest supermarket with a market share of 7 per cent - and a record-breaking Christmas helped it rake in more than £10BILLION worth of sales for the very first time.

Lidl meanwhile said its sales rocketed by 16 per cent in December as Brits' flocked to its shops to stock up on groceries for the festive period.

To build on their success both stores - in sharp contrast to their competitors Tesco, Asda, Sainsbury's and Morrisons - are planning on opening more than 800 new shops across the country by 2022.

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And while their cheap prices, special offers and "no frills" approach has tempted millions to start shopping with them, experts say their success has helped drive down prices across the board as the major chains try and fight back.

Kevin Craig, management expert and ceo of communications firm PLMR, says that their rise has been great news for Brits, with their focus on quality products at low prices forcing the "big four" chains to slash their prices too.

"Their emergence has been a positive for shoppers as it has forced the bigger names to look at the breadth and quality of their products - and try and compete when it comes to cost," he says.

"And although the big supermarkets have been able to narrow the price gap in recent years, they've not been able to reverse the steady stream of customers defecting.

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"With Aldi and Lidl both recently announcing they are looking to open hundreds of new stores, and continue in doing battle in an ongoing price war, it can only be good news for the consumer."

Because of the pressure, the big four chains have had to react, as they try and compete for the pound in your pocket.

In January, Asda slashed the price of thousands of items by up to 50 per cent, claiming it will help families cut their weekly shop by nearly £14.

And earlier this month, Sainsbury's said it was stumping up £150million to cut the prices on nearly 1,000 everyday essentials too.

Meanwhile, it's been reported that Tesco is planning on opening a new chain of cut-price stores to compete directly with their budget competitors.

So what has caused both supermarkets to be so successful?

Jane Gordon, has more than 30 years experience in the food and retail industry, working for brands like Safeway, the John Lewis Partnership and Spar.

She says that she shops' success is down to good quality items at cheap prices  - something that hard-up Brits were desperate for following the financial crisis.

"Aldi and Lidl have gone from relative obscurity to number five and eight in terms of market share - that's beyond amazing," she says.

"The recession hit at a time when Tesco and Sainsbury's, for example, were flying high and Asda was the 'go-to' cheap store.

"Cheap often meant inferior quality - but the public weren't looking for items that were cheap but were after good value for money.

"With their restricted range of stock and killer prices, they took the legs from under the major four supermarkets."

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Jane, who now runs retail consultancy business, FMCGenie, says their no-frills approach was also a winner for Brits.

Both supermarkets will often stock just one variety of each item, rather than lots of different brands, which means that costs are kept low - and consumers aren't left confused with too much choice.

Their focus on time-limited deals - Aldi's specialbuys are launched twice a week and "once they're gone they're gone" - also tempts new customers to try them out for the first time.

"Their cool and consistent pricing strategy means the customer knows exactly what they're getting," she says.

"Aldi only sells around 1,300 products - Tesco have more than 40,000 - it'll only sell one ketchup, not 20."

So what does the future hold?

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Well nothing is guaranteed in the supermarket world - and Jane isn't 100 per cent sure Aldi and Lidl will have it all their own way.

"The big chains have had a few years of bouncing from one idea to another and never giving a consistent message to customers," she warns.

"I think things will settle down now and they will start making new identities for themselves.

"They can be strong where Alidi and Lidl are not, like online and embracing new food and drink trends."

But whatever happens, it looks like both retailers will help you save more and more cash on their weekly shop - whether you do your shopping there or not.

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