The supermarket brand race.

With Aldi overtaking Waitrose to become the sixth biggest supermarket chain in the UK – the question is should FMCG brands be worried too?

I read earlier today that Aldi had overtaken Waitrose in the supermarket rankings. Despite increased market share by both (and important to note the top 4 Sainsbury’s, Tesco, Asda and Morrison’s saw a decline in their share) Aldi’s increase was large enough to overtake Waitrose.

As a John Lewis/Waitrose fan myself it’s sad to see Aldi’s overtake, however I am not the least bit surprised. We live in an age where price means a lot. With consumers seemingly prioritising price over brand loyalty, it is hardly surprising consumers are choosing a store specialising in cheaper, less known goods.

Naturally I am sure the big 4 supermarkets are all worried by Aldi’s upcoming, however from a branding point of view the big question is should we be worried too? FMCG brands need their supermarket houses and vice-versa. If more and more people opt for discounters such as Aldi and Lidl less and less people interact with the brands we have all grown up to love.

By no means am I here to tell people where to shop – I for one can admit that at whilst studying at University was the decision between Sainsbury’s and the local Lidl often determined by my bank balance… However, I do think FMCG brands need to acknowledge that their consumer touchpoints (at least those directly at the supermarket) are at risk. Brands need to fight even harder to give people a reason to seek them out, instead of settling for a cheaper alternative at a store which does not sell them. And of course, the big 4 have their own labels themselves to look after – and you can bet that should it come to the point where cuts have to be made – it will be the brands that suffer before the supermarkets own label.

It would seem brands are not only now fighting for supermarket space against the stores own label, but now also directly against entirely own label stores. The battle is just beginning…
Come on the brands… you can do it.

 

Ellie Tutt

09.04.15