It’s a demographic change that has implications across the retail sector. Research carried out last week confirms the established wisdom – Aldi and Lidl are breaking in to traditional markets, and they’re doing it with what can only be described as a whimper from retailers such as Tesco and Sainsbury’s.
Picked up in the Daily Telegraph and Daily Express, as well as being published in the Grocer, research carried out by Him! found that 31 percent of Aldi and Lidl shoppers are from the “AB” demographic (A being upper middle class and B being middle class).
These statistics are all the more remarkable when compared with the makeup of other shoppers – 28% being from the C1 demographic (lower middle class), 14% from the C2 demographic (skilled manual workers) and 27% from the DE demographic (working class semi and unskilled manual workers).
In essence, the largest demographic of shoppers in Aldi and Lidl are now either upper middle class, or middle class. It is an extraordinary change in shopping habits. Indeed, the Grocer points out that you only have to rewind the clock back to 2013 to find that 12 percent of shoppers in those stores were from the AB demographic group. Not unrelated, research conducted in February by the measurement company Nielson found that more than £1 in every £10 spent in supermarkets went to Aldi and Lidl.
Why does all this matter?
Firstly, it makes a mockery of the idea that online shopping is the future. Only a year ago Morrisons were being criticised from all sides for their dramatic slump, with ‘retail experts’ pointing to the company’s failure to diversify into the online grocery market as a fundamental reason for their dwindling market share. Whilst Tesco, Waitrose and Sainsbury’s continue to invest heavily in their virtual offering, how has Aldi and Lidl improved their reach so quickly?
Well a quick search on Aldi’s website will show you that their offering is focused squarely on their stores. The websites’ role is to point out what offers are available ‘in store’, thereby not undercutting the reach its stores can gain, not to mention keeping the brand association won in people walking through their doors. The Aldi website proudly points out that they have over 500 stores, “and counting”.
Secondly, it shows that price really does matter to a lot of people. Whilst Waitrose continues to buck the trend, it is a sign of the times that, seven years after the credit crunch, many consumers are making strategic choices as a result of the pressures before them. It is not enough for Tesco and Sainsbury’s to simply refresh their product range yet keep their prices at the same level. The general trend, at both ends of the market, seems to indicate either a change in product on offer, or a change in pricing, is required to stave off the crunch our middle of the road supermarkets face.
At the moment the battle between Aldi & Lidl on the one side and Tesco & Sainsbury’s on the other looks to be going only one way. This is primarily a consumer-based battle, interrupted only on occasion through Government policy/intervention in areas such as own-label brands. Aldi promises consumers will ‘Live a lot’ after visiting their store. In doing so, they’ll hope to kill off some of their rivals in the meantime.
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January 21, 2021