1. UK DISCOUNT GROCERY Structural not cyclical change STEPHEN SPRINGHAM
March 2014
STEPHEN SPRINGHAM
Senior Retail Analyst

2. Contents Market Structure and Channel Trends Aldi and Lidl in the UK
Key Strategic Initiatives
Further Reading

3. 1. Market Structure & Channel Trends

4. 1. Market Structure & Channel Trends
Kwik Save was for many years the standard-bearer for UK discounting, but is now defunct. Aldi and Lidl now dominate the channel.
German giant Aldi first enters the UK (opening its first store the following year). The UK business falls under the operating umbrella of Aldi Süd.
Aldi’s compatriot and arch- rival Lidl opens its first UK stores. Lidl is part of the German Schwarz Group grocery business.
Having been slowly wound down by its parent, the residual Kwik Save business is liquidated. At its peak (the early 1990s), the business had over 1,000 stores and a 7% share of the UK grocery market.
The UK Netto business was sold to Asda (owned by Walmart) for GBP778m (USD1.3bn). Asda retained 147 stores and was forced to offload 47 others on competition grounds. Netto had around 0.6% of the UK grocery market.
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Netto launches in the UK. The business is part of the Danish retailer Dansk Supermarked Group.
Long-established indigenous soft discounter Kwik Save was acquired by supermarket operator Somerfield (now part of the Co-op) for GBP1.3bn (USD2.1bn).
Lidl UK surpasses the 500 store benchmark.
Aldi UK surpasses the 500 store benchmark.

5. 1. Market Structure & Channel Trends
Historic view - international grocery markets have different heritages. But markets with different starting points logically move in different directions.
France pioneered the hypermarket, Germany the hard discounter. The UK has a limited discounter heritage.