UK Food and Non-food Discounters Market Report 2024

This report provides a detailed review of the UK discount retail market. Respond to your customers’ preferences and behaviours in real-time with data-backed analysis and accelerate your insight strategy today.

UK Food and Non-food Discounters Market – Current Landscape

It’s not only cheaper prices that drive consumers to discounters, but also convenience, with 55% opting for discounters which are closest to them. By positioning themselves in town centres and high streets, close to where people live and work, discounters can meet the demand for convenience from existing customers and attract new shoppers looking for quick and easy shopping solutions. In a sector where supermarket convenience stores are often perceived as pricey, discounters can also stand out, with Aldi’s Local store format being a good example of future market development.

The discounter market is fiercely competitive, with shoppers readily switching retailers if prices aren’t favourable. Implementing loyalty schemes in this sector is challenging due to low margins, but the availability of schemes would sway 29% of discount shoppers to pick one discounter over another. Lidl’s commitment to enhancing its loyalty scheme exemplifies the potential rewards of such investments, despite the challenges.

Discounters can broaden their appeal by tapping into the excitement of deal hunting. By offering a dynamic shopping experience with an ever-changing inventory, they can transform each visit into an exhilarating treasure hunt. This strategy not only attracts bargain seekers, but also appeals to a wider audience who value the emotional thrill of finding unique items.

UK Food and Non-food Discounters – Market Statistics

• Discount retail market growth: Sector growth is expected to slow to 2.9% in 2024. While this may seem significant, it’s important to recognise that the high growth rates in 2022 and 2023 came out of inflation which accelerated value growth.
• Discount retail food purchased: Store cupboard essentials (eg crisps/tinned goods) remain the most bought product type from food discount retailers with 71% of consumers typically buying these.
• Discount retail non-food purchased: Budget-friendly dupes are growing in popularity with 49% of UK consumers agreeing that dupes are an effective way to save on beauty and personal care products.

UK Food and Non-food Discounters Market Report – What’s Inside?

Key Topics Analyzed in the Report

• The impact of inflation on food and non-food buying habits; the categories consumers are most willing to shop around to get the best deals on, and the opportunities within this for the discount retail sector.
• The widespread appeal of discount shopping and the most popular food and non-food discounters consumers shop with and spend the most money with.
• How discounters can go beyond the obvious lure of cheaper prices for shoppers and improve convenience and quality to retain customers and grow market share.
• How friction points in the discounter shopping experience can be eased and the in-store experience elevated through innovations and improved customer service.
• The growing importance of loyalty schemes for discounter retailers to retain and expand their customer base.

Report Scope

This Report examines the UK discount market that it is a broad term rather than a clearly identifiable segment. As a result, we have decided to identify specific retailers that fall into our definition of a ‘Discounter’.

Our definition of a discounter is a retailer that not only uses price as its defining feature, but also follows the discount model of having extremely tight cost controls and very focused buying. On top of this, the retailer must, for the majority of its stock at least, have consistent product lines; because of this the Report will exclude outlet stores like TK Maxx.

Ultimately this means that our market size is based on a fairly limited list, but we believe that this methodology is fair since true ‘discounting’ is for larger retailers; smaller stores are unable to truly achieve the economy of scale required.

Meet the Expert Behind the Analysis

This report was written by Steven Mayles. Steven joined Mintel in 1988, graduating in 1987 from the London College of Printing with a Higher National Diploma in Business Studies. In his role as a Retail Analyst Steven writes Mintel’s series of European Reports. In addition to retail, Steven has gained considerable insight into automotive retail.

While low prices attract shoppers, a focus on location and quality offers discount retailers a chance to stand out and capture market share.

Steven Mayles
Retail Analyst