The Squeezed Middle: How Independent Retailers Can Benefit From Changing Shopper Behaviour

I was interested to learn that the three UK supermarkets growing fastest at present are Aldi, Lidl and Waitrose. That is two discounters who major on low prices and a limited product selection plus our most up-market food retailer. What  do they have in common?They are all very single-minded in what they do. Unlike Asda, Sainsbury’s and Tesco these shops do not offer basic, medium and top-tier ranges: everything is pretty much the same price-range (Aldo and Lidl cheap, Waitrose reassuringly expensive. And yes I know that the Waitrose Essentials range exists but  it is not positioned as a low price option). So being clear with your price positioning seems to work.

Is it all about people with not much money going to Adli and Lidl and people with lots of money going to Waitrose? My own experience is that this is an oversimplification. The Lidl I visited last week had plenty of Mercedes in the car park and customers who were selectively buying high quality, low priced items such as single origin, high cocoa solids 100g chocolate bars. The after effects of the economic recession have made shoppers more promiscuous – they are less likely only to shop in one supermarket. It may be that we are moving towards the German model where you are seen as canny if you get your loo rolls from a discounter and your baguette from the local French deli.

What can the natural food retailer take from this?  Low cost is attractive to customers but it is not the only option. Having a clear and well-signposted price position is important, whether you are low cost / no frills or whether you justify higher prices through a  higher-quality shopping experience. Perceived value remains the key.