srcg wake-up: Charity starts on the High Street

We all know that the discount sector is booming. With Aldi and Lidl now the fashionable places to be seen filling up the limited boot space in our Audis and Mini Coopers, rather than stores we would rather not be seen sneaking out of.

Even the deep Value retailers such as Wilkinsons and Poundland have made a successful grab for our diminishing disposable income, as we try to make ends meet on the back of an economic forecast which is only matched in the miserableness of its outlook by the current weather forecast.

But now it would appear that we have all stopped giving to charity shops and instead have started shopping in them as they too report substantial sales growth to buck the general retail trends. Overall profits are up over 7% on the year with The Salvation Army leading the way, up a whopping 64%! Good for them, although I’m not sure my local High Street would benefit from any more retail space being dedicated to this channel.

With no bottoming out in sight for the softening economy and hints that unemployment could be the next indicator to start rising, it is critical that all retailers and manufacturers employ strategies that show how they sympathise with the plight of their shoppers. When doing this though it is key that they play to their brand strengths and avoid contradictory messages which will confuse shoppers and send them scurrying to competitors for comfort and solace.

It makes sense for Sainsbury’s to introduce a ‘switch and save’ campaign to promote its private label and for Tesco to launch a new service on its website pointing out alternative, cheaper options to products you might usually buy. We trust these retailers, yes even Tesco, to do the right thing for us and this is playing to their strengths. We know the economic problems are down to the banks and the government, don’t we?

Some manufacturers, however, have given a new meaning to the term shrink and have started offering smaller packs for the same price - this activity is rampant in the USA. Whilst on the face of it this may appear to be a shopper friendly move to keep prices stable it has backfired as shoppers see it as profiteering and would rather not have portion control imposed on them. Funny things shoppers, and potentially lethal for your brand.

One brand that is trying to stretch beyond its current mind-space is Aldi, which is making a dash for market share and is shoring up behind its gains to make certain we don’t Taste the Difference and return to our old ways when the good times start rolling in again (as they eventually will).

Using up-market adverts featuring a celebrity chef, Aldi cleverly combines core territory, feeding a family of 4 for £10, with a twist by using far more exotic foods than you would usually associate with the retailer.

Whilst strengthening its fresh and local produce credentials, there has also been a clear focus on improving the store environment, and with the ‘wow’ factor still coming at the till, when the credit card barely breaks sweat, their retention strategy has meant that first-time shoppers have quickly become converts.

However, whilst the discounters are exuding durability, if I was Oxfam I would make hay whilst the sun shines, at least proverbially that is.