Sunday, February 15, 2015

Aldi and Lidl Garner Success with Quality Private Label

What’s keeps eating away at legacy CPG national brands not new niche competitors but retail brands that vertically integrate quality private label foods.  Consumers rapid adoption of retail private label brands from Whole Foods, Trader Joes, Aldi in the US now to Aldi and Lidl in Great Britain are challenging the legacy grocery model itself. 

Nielsen in a new report found that “discount retailers Aldi and Lidl now account for more than 10% of sales at the UK’s leading supermarkets. Aldi and Lidl’s combined market share hit 10.7% during the twelve weeks ending 31 January 2015.  

Nielsen UK head of retailer and business insight Mike Watkins stated “Initially built on the premise of saving money, the new wave of discounters are now a regular part of grocery shopping and have changed shopping habits forever….

“For instance, switching to cheaper grocery brands is again the number one household tactic for saving money. Furthermore, nearly half of those cutting costs will continue to buy cheaper grocery brands even when economic conditions do improve….

“However, what is different this time is that discounters are no longer solely associated with price. They’ve been very astute at promoting the quality of their offerings to appeal to a wider range of consumers.” One thing is clear smaller footprint stores, quality private label fresh and prepared food will continue to drive change. 

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