Aldi and Lidl 'to target richer areas'

Wednesday, 22 October 2008

Aldi and Lidl could be about to move into a number of more affluent areas in a bid to further pressurise their upmarket rivals, according to new research.

Researchers CACI have pinpointed 1,000 areas where the discount retailers could continue to expand, including a number in the south.

The company said that these areas would be suitable for cut-price grocery chains, while the discounters should see success because customers come from all backgrounds and are not all on low incomes.

Its comments came after Aldi claimed that efforts by Tesco to fight back in the price wars have not been successful.

Location expert at CACI Paul Langston said that the move will allow the retailers to attempt to take custom from elsewhere.

"If Aldi and Lidl can locate in new areas with similar demographic profiles they stand to attract a good customer base. As well as struggling and secure families, this includes many of the wealthiest groups in the UK, many of whom are traditionally Sainsbury's shoppers," he commented.

And Tesco is "right to be concerned" about the growing threat from the discount retailers, he added, following the release of the supermarket's discounter line, which it is reportedly looking to expand.

However, Langston said that Sainsbury's has yet to follow Tesco into the discount sector even though Aldi and Lidl are no longer "fringe players".

Shoppers are becoming more value-conscious, he said, as the economy goes into recession.

Can Aldi and Lidl truly match the big four, such as Tesco and Sainsbury's? After all, Tesco has a market share of roughly 30%, while Aldi's is 3% (according to TNS). Have your say below.