Supermarkets such as Lidl and Aldi will be going head to head with the likes of Sainsbury’s as middle class families begin to shop at discount supermarkets according to the latest study by CACI.
CACI has identified 959 new locations in the UK that could successfully support a discount supermarket.
It said, in its ProVision report on the state of the grocery market, that ‘discounters now have the opportunity to challenge Sainsbury’s on its home turf’.
Paul Langston, associate director for Location Strategy, CACI said: ‘The people who go to Aldi and Lidl to top up their main weekly shop are representative of the population living nearest to those stores.
'So if Aldi and Lidl can locate in new areas with similar demographic profiles they stand to attract a good customer base.
'As well as struggling and secure families, this includes many of the wealthiest groups in the UK, many of whom are traditionally Sainsbury’s shoppers.
'These cash-rich, time-rich ‘affluent greys’ and the ‘flourishing families’ will use Aldi and Lidl if they are within the catchment – significantly increasing the discounters’ market share.’
CACI’s ProVision report pinpoints London and the south east as presenting the greatest opportunities for the discount grocers – where they currently have few stores and where many of their target customers lie.
If the discounters manage to deepen their share of the broader groups already using their stores for top-up shopping, CACI identifies a total of 959 new locations UK-wide that could successfully support a discount store.
This expansion would see Aldi and Lidl stores moving into middle-class towns like St. Albans, Horsham and Highgate, severely impacting on sales for supermarkets currently operating in these areas.
Based on the discounters’ current growth plans, ASDA is identified as the supermarket chain most vulnerable to this discounter expansion.
CACI estimates that almost 40% of Asda’s current grocery spend comes from areas in which Aldi or Lidl currently have a store – based on the fact that ‘Struggling Families’ make up such a high proportion of Asda’s shoppers.
Morrisons is the next most vulnerable grocer, with more than 30% of its sales coming from sectors that overlap with the key discounters.
But CACI said if discounters seize the opportunities to grow in the locations identified by CACI’s report, it is Tesco which has the most to lose.
CACI estimates that there could be a discount competitor in areas from which Tesco currently draws over £20bn of supermarket sales. Sainsbury’s could be challenged for over £11bn of its sales, which come from areas where it directly competes with Aldi or Lidl.