Discount Retailers See Success In The Retail Market Segment That Grew Through The Pandemic
Discount retailers, both in the UK and beyond, have witnessed huge successes in their trading throughout the pandemic – proving to be one of few success stories among retailers in the unprecedented circumstances faced over the last 18 months in the retail industry.
Discount retailers provide their range at a price that is lower than the expected full retail prices. Even prior to the pandemic and the economic implications that came with it, the discounter model was proving a success in many economies. In many Western economies, the snobbery which had discouraged discounter shopping was being left behind with consumer attitudes shifting. Many began to even be proud of the ‘savvy-shopper’ status, with multiple online interactions boasting of bargain buys.
The rise and ongoing success of Aldi in the UK exemplifies this trend, as the discount supermarket chain has grown to be competition for the ‘big 4’ supermarket chains in the UK. It has seen store openings in upmarket, middle-class areas, which was previously unheard of. The company’s success also goes far beyond the UK, with TBRC’s data placing Aldi as the second largest retailer within supermarkets and hypermarkets globally, only falling behind The Kroger Co, US supermarket giant.
Last week, another UK discounter chain, B&M reported a doubling in profits in the 12 months to March 27th. Again, the company has ridden the situation presented to them by the pandemic well. As an essential retailer, they have been able to keep their doors open throughout the pandemic. The retailers available to consumers was of course limited, perhaps meaning that shopping in discounters such as this offered some variety. Furthermore, lower consumer confidence leaves many consumers seeking the lowest prices for their essentials. The retailer also offers homeware, which have proved popular amongst those consumers working on home improvements during lockdowns.
According to macro market database, Global Market Model, the global retail market was worth US$20.3 trillion in 2020, with an expected increase to US$22.5 trillion by the end of 2021 at a growth of 10.8% – highlighting that despite the pandemic and many retail casualties, the market does present opportunities. These opportunities are especially clear among discounters, and of course in ecommerce.
Indeed, considering just supermarkets and hypermarkets in the UK, the market was valued US$132.1 billion in 2010, and is expecting to total US$139.5 billion in 2021, following growth at 5.6%. Supermarkets were among essential retailers in the UK, thus, they have remained trading throughout the pandemic.
Activity across the retail landscape in the last year is unparalleled, with the market witnessing both casualties and success stories. In the UK, many essential retailers have seen success, with this extending to discounters who have been growing in popularity in the UK over the past decade. Assuming the retail sector now has the chance to recover, our data suggests the comeback will be strong – seeing how many of the habits of shopping online and in discounters continue beyond these pandemic times will prove interesting.
The Retail Global Market Report is one of a series of new reports from The Business Research Company that provides retail market overviews, analyzes and forecasts retail market size, share, retail market players, retail market segments and geographies, the market’s leading competitors’ revenues, profiles and market shares.
About The Author
Kirsty has more than nine years of experience in market research, specializing in consumer markets including FMCG, retail, and hospitality. She held positions as Senior and Lead Analyst at Canadean, GlobalData, and FMCG Gurus before taking the position as Lead Editor and Consultant at TBRC. Her experience covers a wide range of projects, including both market and consumer data, managing reports and databases, and leading specialist projects for clients including PepsiCo, Tyson Foods, and Tate & Lyle. Kirsty started her career as a financial analyst in the mergers and acquisitions market after graduating from The University of York.
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