Last week's Kantar Worldpanel trumpeted the huge news: Lidl is now the number seven grocery retailer in the UK.
What I found just as interesting was what's not being more clearly called out: inflation & store numbers
Hurrah! Inflation is driving top-line. So it should. The problem is, if you are not tracking ahead of inflation, you are still declining - and the big 4 are struggling and will largely continue to do so.
If the Booker deal doesn't proceed. What then? If it does, Tesco will find themselves focused on store and supply chain optimisation and there are real risks of loss of short-term focus on the core as management time deals with structural property issues
JS are also in a bind, their NISA bid looks decidedly less tasty after the Morrisons/McColls coup and is already and unsurprisingly rumoured to be on hold. They have to hope the Argos move really delivers.
So of the four, only Morrisons seem to have their act together at the moment, but even then the McColls deal is not a slam-dunk and will have to deliver value. It buys Morrisons time, maybe two or three years as the deal expands their effective store base
These factors are the killers. The limited range has a very limited impact on the number of items per trip shoppers buy, but they have a massive impact on system efficiencies and price. And will continue so to do. The more stores they open, the more winning they will do.
So here's a thought, when you see the quarterly share data, take half and hour and think about your business and retail customer investment choices moving forwards and consider what insights might be drawn
- Do the inflation check - who is winning, really
- Make sure you are modelling each chains store numbers and development plans into your thinking - where will each chain be in 1, 3 and 5 years - and what share will they have?
- If you aren't learning how to win with Aldi and Lidl, you are already losing
- If you are a food business - make sure you have a credible out of home strategy
- And I didn't even get to Amazon yet