Amidst a competitive UK grocery market, discounters like Poundland and B&M are making significant pushes into the sector
- The cost-of-living crisis has boosted their appeal, attracting more budget-conscious consumers
- Discounters are expanding their product ranges to include fresh, chilled, and frozen groceries
- Supermarkets, such as Asda, are responding with defensive measures like price matching
- Industry experts predict continued growth for discounters, potentially impacting both big supermarkets and smaller retailers
In the highly competitive UK grocery sector, discounters such as Poundland and B&M are making notable inroads. This expansion into groceries is seen as a strategic move to increase consumer footfall and enhance their price competitiveness across a broader product range. According to Nick Gladding, retail analyst at Global Data, this allows discounters to cater to more consumption occasions and shopper missions.
The cost-of-living crisis has driven consumers towards discounters, who offer low-price points, accessible pack sizes, and tertiary brands, making them attractive to budget-conscious shoppers. Bryan Roberts from IGD highlights that discounters have become a credible destination for groceries, which has resulted in increased shopping frequency and larger basket sizes.
Discounters have diversified their offerings, with Poundland introducing fresh products, including meat and fish, and rolling out frozen and chilled foods in over 570 stores. Home Bargains has also been expanding its grocery sections to include fresh baked goods as part of an in-store bakery initiative, addressing the growing demand for fresh items.
Supermarkets are aware of the threat posed by discounters and have implemented strategies like price matching to neutralise this competition. Asda’s Home Bargains Price Match mirrors the prices of various products, aiming to retain customers who might be lured by discounters’ pricing. However, there are concerns that this might dilute the supermarkets’ quality image.
Experts anticipate the growth of discounters to persist, with the sector projected to generate an additional £2.2 billion between 2023 and 2028. This growth is expected to pose a challenge not only to major supermarkets but also to independent and convenience stores, which may suffer from lower foot traffic due to competitive pricing strategies from discounters.
The expansion of discounters into the UK grocery sector is reshaping the landscape, offering consumers more options and challenging traditional retailers.
