The story is a familiar one. Savvy mother-of-four saves thousands a year by switching her weekly shop to Aldi (1). The notion of an exotic holiday paid for entirely with 20 pence savings on pints of milk is too enticing to resist and you decide to take the plunge. With your bag-for-life in hand, a guilty token from your jilted supermarket, you head with cautious optimism to your first discount grocery experience.
Do the stories ring true though? A recent study by Impact Research of 1,725 GB grocery shoppers has examined the phenomenon of discounters and has asked the question, are the savings worth it?
The study has shown that more than half of Aldi and Lidl shoppers cited a desire to reduce their overall monthly spend as a key factor in deciding to shop there. However, it also revealed that this does not always play out in reality. On average, those who started to include discounters in their supermarket repertoire to reduce their monthly grocery bill, spend only £5 less per month on their total grocery shopping than those who don’t shop at Aldi or Lidl (£235 to £240).
Having Aldi or Lidl in your shopping repertoire often doesn’t mean you are making huge savings at the end of the month. With this in mind, what are we trading off by shopping at the discounters; and is it worth it? It has been well documented in the press and supported by Impact Research’s survey that discount customers claim to be less impressed by Aldi and Lidl’s unfamiliar store layout and limited range of products (where is the quinoa?). Are these acceptable trade-offs for the value price of quality grocery products? It all seems worth it when you leave the till: 29 pence on a cucumber; 40 pence on a loaf of bread (2). After your first discounters experience, you leave the shop feeling thoroughly smug for cheating the system and look forward to planning your luxury holiday with the thousands you naively expect to save this year.
So what is going on? When frequent ‘essentials’ basket comparisons show the huge savings to be made by shopping at the discounters, why are people claiming to spend barely less over the whole month compared to those that don’t shop at Aldi or Lidl?
It has long been understood that shoppers may spend more in store if they believe they are getting a good deal. Dr. Dimitri Tsivrikos, a consumer psychologist, claims that this is because when we are “excited by a bargain, this interferes with [our] ability to clearly judge”(3). Our study also reveals that discount shoppers view Aldi and Lidl products as of comparable, or better quality than the big four retailers. This means that consumers could be purchasing more food, or better quality, more luxurious products and maintaining their monthly spend this way (£9.97 for award winning Champagne Brut anyone?) (4).
Shoppers are also not reducing their monthly spend drastically as they are not using discounters for their main weekly shop. Instead they do ‘top-up’ or ‘specific item’ shops at Aldi and Lidl. Despite Aldi claiming that customers say they can do 90% of their weekly shop in Aldi alone, our latest study shows we are more likely to do smaller shops there (5). We aren’t making these huge savings as we buy most of our groceries elsewhere. Impact Research’s study demonstrates the promiscuity of discount shoppers who have just over five different grocers in their repertoire compared to the three visited by non-discount shoppers.
Overall, is it worth shopping at the discounters? At the moment, most aren’t making the huge savings that they anticipated. However, the way we shop at the discounters is evolving. With one in five Aldi and Lidl customers saying they will shop there more often, the discounters look set to grow thanks to their existing customers. New customers will also help the expansion as Aldi and Lidl plan to open more stores in new locations. This will chip away at the biggest barrier for non-discount grocery shoppers, that of not having a store in a convenient location. For now, we can reassure ourselves that, at the end of the day it was worth it because that bottle of champagne went down a treat and it’s hard to beat that self-satisfied feeling when you know you’ve just bagged a great deal.
As seen in the Daily Mail, BT News and Fruit Net.
2. Prices based on Lidl and Aldi offers 10/06/15