Archive: Discounters gaining ground in GB retail cheese market

Published 14 January 15

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The hard discounters (Aldi and Lidl) continue to make ground in the GB retail cheese market, mirroring their growth across total grocery. Over a two year period, their share of this market has risen by almost 4 percentage points, reaching 10.5% by November 2014. In the year ending 9 November 2014, 43,500 tonnes of cheese were sold at the hard discounters – an increase of 16,500 tonnes (61%) in two years. This has come at the expense of the Top 5 retailers (Tesco, Sainsbury’s, Asda, Morrisons and The Co-operative), who have seen a 6% drop in volume sales over the same two-year period.

The growing influence of the discounters in this market arises from consumers’ growing preference for private label products, as they trade down from branded in order to save money. Indeed, in the 52 w/e 9 November 2014, private label cheese was £1.46/kg (23%) cheaper on average than branded options. At the discounters, 93% of cheese is private label, whereas this figure falls to 59% at the Top 5 retailers.

The hard discounters have also increased market share in the milk market, by two percentage points over the past two years. However, in this market, the share belonging to the Top 5 has not been directly impacted. The major retailers have in fact seen market share by volume grow by 1.6 percentage points over the same two-year period. Consequently, market segments such as doorstep deliveries and Independent and Symbol stores have been squeezed, likely as a result of the increasing price differential arising from the retail price wars.

GB dairy market shares