Asda, Tesco, Sainsbury’s and Morrisons could regain market share back from discounter supermarkets, by making improvements in products range and customer service, argues a report by retail consultancy Newton.
The study called ‘Beating the Discounters’ argues that by making improvements that are attainable within less than 12 months, the ‘Big Four’ could tap into £4 billion operational-improvement cost-savings that currently sit within the grocery industry.
Newton has reportedly documented a “huge gap between shoppers’ perception of the discounters and reality”, as Aldi and Lidl have recently been named the UK’s top brands.
According to the report, location, range and habit topped the list of the most important motivators to shoppers when picking a grocery store, with price being prioritised by 34% of consumers.
Newton argues that the ‘Big Four’, or else known as multiples, are already delivering on those areas cited as most pivotal to consumers, and should therefore promote these existing differentiators from discounters “by simply managing stock replenishment more closely”.
In addition, Newton proposes that “by reinvesting these savings into the 1,500 overlapping products that sit across the discounters and mutliples, the ‘Big Four’ can reduce the cost of these items to match cheaper rivals in a cost-effective manner”.
Paul Harvey, head of grocery at Newton, noted that for “an average multiple to reduce prices on an entire range” to match those of the cheapest discounter supermarket, it would mean a “profit hit of approximately £1 billion”.
He added: “By ‘myth busting’ this perception, promoting the areas the multiples are already exceling in and by making some crucial, but quick changes that maintain customer services whilst reducing cost, we believe the whole retail landscape could be thrown on its head before the end of the year.”
This story was originally published on a previous version of the Meat Management website and so there may be some missing images and formatting issues.
