As a lad, give or take about 40 years ago, I can remember being dragged along to the supermarket every week to help push at least one large trolley around.
As Peter Kay would say, we were doing the ‘big shop’…week in and week out. The local convenience food stores and corner shops were only used in ‘extreme’ circumstances - when something was so urgently required that a premium price could be charged and would be paid.
How things have changed over the past few decades. To me, the arrival of the German discounters in the early 1990s was the initial catalyst for the changes in our shopping habits in the UK. These changes have been exacerbated by the ongoing evolution of internet shopping/home deliveries, the recession and more recently, dare I mention, Brexit.
The ‘perfect storm’ caused by these factors has, in my opinion, contributed to the recent decline in big food store development and the significant increase in market share for both Aldi and Lidl over the past few years.
Of course, in parallel, both operators have evolved their respective business models to maximise the opportunity that has been presented to them. In the 1990s, the standard Aldi and Lidl store was c.12,500 sq ft whereas, today, their standard store sizes generally range from c.18,500 sq ft to c.24,000 sq ft.
Also, during the 1990s and 2000s, their product range numbers were about 800-1,000 (compared to the big four operators, who had roughly 20,000-50,000) and would mostly be unknown, foreign brands (whereas competing operators had a vast range of well-known brands).
Over the past decade or so, both Aldi and Lidl have increased their product range and have introduced well-known UK brands whilst maintaining their philosophy of deep discount retailing. A significant and ongoing draw for Aldi and Lidl customers is their constant provision of interesting products in their ‘specials’ aisles, where they both have a stack of quality products for low prices, likely to be of interest to shoppers of all ages.
It is clear that UK consumers’ shopping habits have changed. Gone are the days of the ‘big shop’ and, nowadays, many people prefer to shop for food at local convenience stores on a day-to-day basis or online. However, I’d say the single biggest change has been the ongoing expansion of the discount food stores.
Twenty years ago, my home town of Bromsgrove would have been considered only big enough to have one discount food store. There are now three such stores, with two Aldi stores and one Lidl, all apparently trading very well.
I can only see the prevalence of discount food stores across the UK and Europe continuing to go from strength to strength. Essentially, in this day and age, both Aldi and Lidl also have excellent internet shopping platforms but I’m sure they’ll continue to take on more and more new stores.
From a property perspective, whilst they both still prefer to buy land and own their own stores on a freehold basis, Aldi and Lidl do enter into leasehold deals with a minimum term of 15-20 years and with guaranteed minimum/maximum rent review uplifts, which will continue to make them extremely ‘viable’ propositions for property developers and investors.
Ashfield Land is currently involved in several discount food store deals across the UK, including the ongoing development of ‘Sinclair Retail Park’ in Evesham which will complete this year and will accommodate a new Aldi alongside TK Maxx and Home Bargains.