UK discount stores boom

Wilkinson, Pound Stretcher, 99p Stores. They're all booming, according to new research from retail trade magazine The Grocer. It's not hard to understand why: food inflation continues to hurt, as do fuel and energy prices.

Meanwhile supermarket cheapies like Aldi and Lidl continue to eat into the market share of players like Tesco. Are UK shoppers just plain cheap?

Cheap thrills

Increasingly so, and with good reason. Many resent the mismatch between huge corporate profits and questionable value for money. So-called 'deals' "Price Checks' and 'Big Price Drops' have often been found wanting when closely scrutinised. (Just ask Tesco). Throw in often indifferent service...

Cheap shops not only offer decent value prices but a lack of pretension. That lack of pretension has seen cut-price stores dominate the top 50 independent grocery retailers, according to the The Grocer, with six of the top ten being discounters, grabbing 66% of all profits.

Encouraged by their success, Poundland, for example, has European expansion in mind, as well as frozen expansion plans - cheap, chilled food could be en route. But there will be no plans to hike the price.

Big under pressure

If, Poundland boss Jim McCarthy recently told the Grocer, "you start planning to go to £1 plus 2 ½p, you've lost it". Poundland, then, will simply change the pack size.

In contrast, Big is looking increasingly clunky and over-sized. The reliance on huge, out-of-town shopping centres served bigger supermarket players well when economic confidence was robust - particularly for non-food lines like clothing and electricals. But consumer confidence is now in a very different place.

Finally, cheap doesn't mean poor quality. Last year a survey from Manchester Metropolitan University found that 91% of Aldi's own-label brand were just as good as the big brands, while 27% performed significantly better than branded counterparts.

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