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Strong growth forecast for UK discount retailers

Lidl, Aldi and B&M Bargains have a combined share of 70% of the discount retail market.

The UK discount retail market is forecast to grow more than 36%, reaching a total of £32.5bn by 2022.

GlobalData, the leader in business analytics, predicts that the sector will gain an extra £9bn slice of the market over the next five years.

The data is driven by an increasing number of consumers who are seeking out bargains as their disposable income is being squeezed by inflation.

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The move comes as good news to retailers Aldi, Lidl and B&M Bargains who dominate the sector with a combined 70% stake in the discount retail market.

About 9.4 per cent of the UK population has shopped at a discounter in the last 12 months, according to the data analyst.

DIY & gardening, health & beauty and homewares are expected to deliver the strongest category growth.

"Our report findings confirm that discounters have done an exceptional job in gaining market share of frequently purchased items by changing the perception of discounter own label products in F&G while at the same time undercutting mainstream retailers on branded items in H&B and household,” said Molly Johnson-Jones, senior food & grocery analyst from GlobalData Retail.

“This combined approach has proven to be very disruptive in the market and has contributed to their success,” Johnson-Jones added.

Food & grocery is the division with the highest market value, worth £15.7bn in 2017. GlobalData expects this to grow to £21.8bn by 2022.

DIY & gardening and homewares are forecast to grow 46.6% and 42.6% respectively over the next five years.

Johnson-Jones said:  “The discounters have expanded their range in the DIY & gardening market at a time when consumers are seeking reduced cost solutions for doing up their homes and gardens – B&M will particularly outperform in this area as it adds garden centres to its retail estate over the next few years.”

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