fbpx
Log in

Login to your account

Username *
Password *
Remember Me

Create an account

Fields marked with an asterisk (*) are required.
Name *
Username *
Password *
Verify password *
Email *
Verify email *
Captcha *

Aldi and Lidl set to win

aldiBritish supermarkets will never return to their historic profit margins of 5%, according to predictions made by ratings agency Moody’s.

Tesco, Sainsbury’s, Morrison’s and Asda, in their competitive price war against the well-known German discount stores, will have to keep reducing their prices which will result in lower profit margins.

Moody’s said that “Aldi and Lidl are now entrenched”. Their combined market share of 8.3% could reach 10% in the next few years, it estimated.

“Over time the discounter's UK market share could be similar to that of discounters in other European countries at around 12%-15%," it said.

Moody’s noted that average grocery margins in Europe are more like 3% or 4%, not the 5% the Big Four are used to.

The German discounters outpace the established retailers due to their "more lean cost structure, smaller store size, lower range of offerings with better inventory turnover and lower in-store operating costs", according to Moody's.

The agency also predicted that even if wages improve, British consumers will continue to believe in the value and quality on offer at the discount stores and keep shopping there.

Pin It

You must be a registered user to make comments.
Please register here to post your comments.