Specialist
Executive at Lidl Great Britain Ltd
Agenda
- Cost price inflation dynamics within the UK grocery retail market
- Aldi's ability to gain market share in a high inflation environment
- Top-line and margin drivers across Aldi and discounters in light of inflationary pressures
- Discounters vs the big four – Tesco (LON: TSCO), Asda, Morrisons (LON: MRW) and Sainsbury’s (LON: SBRY)
- 2022 growth and store-expansion outlook
Questions
1.
What key trends have you noticed within the UK grocery retail market over the past 12 months or since your previous Forum Interview [see UK Grocery Retail – Average Basket Trends & Consumer Behaviour, Pricing & Governance Outlook – 1 September 2021]?
2.
How have the trends you mentioned shaped the grocery retail sector’s financial performance over the past 12 months? Could we think about that in like-for-likes?
3.
How do you see market trade evolving over the next 6-12 months? What are your thoughts on average basket size and frequency, given a lot of inflation has come through? How might that affect the market?
4.
How might in-store consumer buying habits change and evolve under the high-price, high-inflationary environment?
5.
Would the inflationary environment impact frequency of shop, with consumers looking to have more shops during the week, but perhaps at less value? Alternatively, might there be bigger, less frequent shops when the consumer’s wallet is under pressure?
6.
Do any product categories stand out that might be more under inflationary pressure and are facing cost increases?
7.
Do any categories have better pricing power vs others?
8.
Do you expect any change to the basket mix within categories? Would any categories be over- or underweighted from a basket mix perspective, given the environment?
9.
On a normalised basis and assuming that supply chain pressures and availability improve in 2023, do you still expect a change in buying behaviour from the consumer in terms of basket mix? Do you expect similar behaviours, despite being under some wallet pressure?
10.
How might the discounters approach their pricing strategies, given the environment we’re facing?
11.
Do you foresee the discounters’ 10-15% price gap you mentioned being maintained, or could it extend or narrow?
12.
Do you expect the discounters to continue to grow their market share over the next few months, given the environment? Given the discounters’ price gap is expected to be maintained and is really well-priced, coupled with what’s happening to consumer wallets.
13.
You mentioned the discounters will see some market share gains. On the downtrading side, which of the big four grocery retailers – Tesco, Asda, Sainsbury’s and Morrisons – are most exposed to lose out on the market share that Aldi and Lidl might gain?
14.
What do you make of Tesco’s Aldi Price Match strategy? Has it been a success? We know Tesco has been pushing it very hard.
15.
Should we expect any more targeted advertising approaches from any of the other big four, given Tesco’s success with the Aldi Price Match?
16.
We mentioned online, the penetration of which has been stagnating. The discounters obviously haven’t entered that online proposition, but do you expect this to change, especially for Aldi? Would the company ever look to go into a full online proposition? Why or why not?
17.
How are players such as B&M, Poundland and Iceland viewed in the grocery retail market’s competitive landscape? Are they starting to encroach on the discounter space?
18.
Are there any direct impacts from the Russia-Ukraine conflict on the UK grocery food market?
