Food Discounters Georgina Cameron, Michelle Garcia, Vicki Pereira, Jane McKenna and Madeleine Frid

What are Food Discounters? Stores which sell foods at reduced prices. They cut costs by having small numbers of staff, minimal technology and few named brand goods.

Major Stakeholders 4 Main stakeholders: Aldi Netto Lidl Kwik Save

Historical developments Originated in europe Aldi was the first - opened in Germany in 1948 Introduced into Britain in the 1990s 1993 - Tesco and Sainsburys introduced their budget ranges “the multiples have cut off the discounters life blood”

Economic Status Growth in food discounters is higher than that for the UK retail industry as a whole Less than 1% of total retail industry Represents 10% of grocery market Estimated £1.49bn in 2000 Supermarketing, April 14 1995

Economic Status How do discounters make their money? Concentrating on own label products Buy stock at lowest possible prices - sold at low prices Few staff - low wage costs Smaller stores Little advertising - In 2001 Aldi spent just £3.2 million on advertising. Tesco spent £1.1 million on Value range alone

SWOT analysis * Aldi only IGD research

Current Trends Aldi dominates German discounters Aldi now have 250 UK stores In February 2001 Aldi opened their first store in Australia Aldi had invested $A 472.9 million in Australia by the end of 2001 Early in 2001 Aldi and Lidl bid for Iceland Infotrak

Innovation Innovation: “An idea, service, product or piece of technology that has been developed and marketed to customers who perceive it as something novel and new” Kotler and Armstrong, Marketing in Practice

Innovation Back to basics Store layout Low price strategies Just in Time stock control

Growth Potential Aldi and Lidl’s Current business strategy: IGD research

Growth Potential Aldi Stores in the UK Lidl stores in the UK * Estimate Lidl stores in the UK A.C Nielson/IGD research

Future Prospects Expanding into more countries Supermarkets are responding by lowering prices “the biggest threats to discounters are each other…. It is predicted that only Kwik Save and Aldi will be the primary survivors” Reed Elsevier Business Publishing Ltd 1995

Are customers more interested Future Prospects Are customers more interested in price or quality??