LDC: analysis of discounters versus supermarkets

A new report published by The Local Data Company (LDC) looks at the growth of supermarkets and discounters from 2010 to 2015.

LDC: analysis of discounters versus supermarkets

The report analyses growth by fascia and by town, and identifies how and where the mainstream supermarkets have seen growth in competition and thus loss of market share as discounters have opened up around them.

The overall growth rate for supermarkets and discount stores across towns was 42.5% (1,949 units). Discounters opened 1,367 units at a growth rate of 48% in the five-year period, while supermarkets added 582 units at a growth rate of 34%

In 2014, discount stores’ growth was twice as fast as the big four supermarkets (Tesco, Sainsbury’s, Morrisons and Asda), with each discount store growing on average by 33 units compared with the big four who grew by 16 units on average.

Overall, Tesco has the most stores (40) in the fastest growing towns (towns with the highest percentage of net change – supermarkets and discount store openings) in the last five years, while Sainsbury’s has the fewest (11). Morrisons has the largest percentage (49%) of stores in towns with above average number of discount and supermarket stores.

LDC director Matthew Hopkinson commented: “This report clearly shows why supermarkets are losing ground to the discounters. Of particular significance is that the growth of both supermarkets and discounters has continued unabated for the last five years. As such, it was only a matter of time when sales and profitability of the big four supermarkets would be impacted. Add into the mix the growth of convenience stores by Tesco, Sainsbury’s and Morrisons and the issue is further compounded, along with creating cannibilasation of existing supermarket stores by the same company’s convenience stores.

“With continued growth of discounters, supermarkets and convenience stores (+2,253 since 2010), more pain lies ahead, which is further compounded by the rise in food and beverage operators (+15,000 since 2010) who are responding to an increasing trend for consumers to eat out rather than eat in – which will further impact supermarket sales.”

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