Deep Dive 19 minutes PremiumAldi and Lidl’s Impact in the UK: Reviewing Five Fightback Strategies Among Nondiscount Grocery Retailers Coresight Research April 18, 2019 Executive SummaryAldi and Lidl have brought major disruption to the UK grocery market — and they could be on course to add another £9 billion of combined sales over the next five years. In this report, we review five measures major UK grocery retailers have taken to fight Aldi and Lidl, and how successful each has been. Nondiscount grocery retailers have made radical cost-cuts, shedding thousands of staff at head offices and in stores. Generally, the visible impact to shoppers seems to have been minimal. However, an apparent slippage in store standards at Sainsbury’s as a result of job cuts risks its differentiated positioning. Range reductions have let Tesco channel higher volumes through each line. Its range resets have coincided with a recovery in its top line and a return to total volume growth, confirming that shoppers have not been deterred by slimmed-down ranges. Tesco’s new, discounter-type private labels look to be a success, although they may encourage some trading down at the retailer. Tesco’s launch of the Jack’s discount chain is a bold move, but we think the chain’s proposition could limit its appeal to shoppers. Diversification away from core grocery retailing has been successful, creating new revenue streams and giving retailers access to higher-margin or faster-growing markets. The wholesale grocery model, such as that adopted by Morrisons, looks particularly successful. There are doubts over whether Sainsbury’s and Asda can complete a merger successfully. The Competition and Markets Authority (CMA) has indicated it would require a substantial number of store disposals or even one of the Sainsbury’s or Asda brands, which could undermine the economics of the merger. Already a subscriber? Log in You are currently viewing a preview of this report. Please select an access option to view the full report. Hide Options - Show Options + Get unlimited access to all our research with one of our subscription plans. View Subscription Plans or Contact us to purchase this report. Contact us ✕ This document was generated for Other research you may be interested in: Weekly US and UK Store Openings and Closures Tracker 2023, Week 52: US Store Openings Pass 5,500A Growing Movement Toward In-Store Shopping: China Consumer Survey InsightsInnovator Profile: Seer Enables Content Creation and Personalization To Increase Consumer EngagementInsights Video: US Retail and Consumer Outlook