German discounters experience 40% rise as consumers tighten belts

THE number of shoppers opting for own-brand goods has hit a record high while those deciding to shop at Aldi and Lidl has surged 40%.

Research conducted by Nielsen shows the two German retailers have increased their presence in Ireland by 7% since the start of the year, bringing the number of stores to 160, an almost threefold increase in five years.

The most popular products at the German discounters are frozen foods and bakery products.

The report said Aldi and Lidl are attracting new shoppers mainly because a basket of 15 items are on average half the price than the same items at convenience outlets.

The research also shows the share of private label goods hit an all-time high in terms of the share of consumer spend in September, as consumers tighten their belts.

It said because private label goods are on average 33% cheaper than branded products consumers are turning to them more than ever.

The growth in private label sales is most concentrated in frozen foods, household products and general groceries.

Head of marketing at Nielsen, Alan Purcell, said there has been a significant decline in the overall level of consumer spending over the last six months.

He said independent stores and supermarkets have suffered as consumers turn to Aldi and Lidl.

“Our research at Nielsen shows that there has been a significant jump in the number of consumers who would visit discount stores regularly. People who had formerly visited occasionally are now using these stores for their weekly shop.

“There has been virtually no increase in Aldi and Lidl attracting what we call preferrers — those who shop there because they prefer these shops over the competition.

“Clearly the shift in spending patterns is being driven by the necessity of the sharply slowing economy,” he added.

The popularity of private label goods is generally at its peak in January and February as households try and pull back expenditure after the Christmas period, according to Mr Purcell.

“However, what we are seeing this year is a rapid unseasonal increase in the share of private label sales since the start of the summer. I expect that this is a trend that will continue as the recession deepens.”