Value and premium brands thrive in a world of extreme shoppers, OC&C Strategy Consultants study shows

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Waitrose: expansion plans for supermarkets and c-stores

Success for premium brands

Aldi and Waitrose have been revealed as the fastest growing retailers in the UK in a study by OC&C Strategy Consultants.

Aldi and Waitrose, which came in first and second place respectively in OC&C’s rankings of the 20 fastest growing retailers on British soil, epitomise a trend which is seeing value retailers like Aldi, Primark and B&M Bargains, and premium-end brands like Waitrose, B­urberry and Harrods, dominate the leader board. Overall, six premium brands appear in the UK rankings alongside 10 value brands.

German supermarket chain Aldi has grown revenues by an average £1.2bn per year since 2011 (approximately 38% year-on-year growth), as a result of opening about 40 new stores in the UK every year. British supermarket giant Waitrose has seen revenues grow by an average £360m per year (approximately 7% year-on-year growth) over the same time period, thanks to a robust like-for-like sales performance, new store and format openings and developing their online offering.

Aldi: double digit growth

Aldi: value wins through

Anita Balchandani, head of retail and partner at OC&C Strategy Consultants, said: “We’ve seen the majority of growth in the retail sector come from its polar extremes in terms of price position. Although at first glance these retailers have little in common, what they all share is a trait to adapt the quickest to what matters most to customers, create strong propositions that are well-rated by customers, and ‎good, transparent value, regardless of their price position.”

The study, which analyses the fastest growing retailers in the UK and the biggest Western retail markets (the US, France, the Nordics, Germany and the Netherlands), reveals that the UK has been a retail growth hotspot in the face of a challenging macroeconomic environment for those retailers that have managed to seize the opportunity. Fashion brands in particular, including Burberry and Net-A-Porter.com (fifth and fifteenth position on the UK leaderboard respectively), have been the engine for growth in the UK.

While the typical retailer operating in the UK grew by an average of only 1% in the UK based on the latest publicly available sales period, the top retailers in OC&C’s rankings have seen average growth of around 17% over the same time span. This has been the case not only for homegrown brands like ASOS and AO.com (ninth and fourteenth place respectively) but also foreign retailers expanding on British soil, like Aldi (first place).

Balchandani said: “The fastest growing retailers in both the UK and across the biggest Western markets show that it is possible to grow against the odds in low-growth economies. They have grown by capitalising on and responding to key customer needs.

“Retailers are succeeding by giving customers the ability to shop on their own terms and reducing all points of friction in the shopping journey. Smooth web experiences, the ability to shop across mobiles, tablets and desktop, or being able to choose from a range of convenient delivery or collection options, have been a great growth formula for many of the pureplay e-commerce successes like Amazon – who internationally is amongst the fastest growing retailers.

“We’re seeing a range of key customer trends – be they the growing importance of convenience, value, luxury and healthy and active lifestyles. Those retailers which grow will find that they do so by exposing their businesses to these tailwinds.”

A spokesperson from Aldi, the fastest growing retailer in the UK, said: “Our distinctive approach to everyday low pricing drives our growth. The efficiencies of our business model allow us to deliver outstanding, often award-winning, quality products at a price that can’t be beaten. With over half our products sourced in Britain, when Aldi customers visit out stores they know they can do their full weekly shop with us and trust Aldi to offer them the highest quality.  In fact, Aldi’s Swap & Save campaign has shown that our shoppers can save 30% to 50% on their weekly shop compared to other supermarkets.

“In 2014, over half of the UK visited an Aldi store and we are proud more and more customers are choosing to shop at Aldi.”

Mark Price, managing director of Waitrose and deputy chairman of the John Lewis Partnership, said: “It’s good to see Waitrose amongst the fastest growing retailers. Against the backdrop of a tough, deflationary market we’ve increased sales, won new customers and gained market share. This growth results from the investments we’re making to create Modern Waitrose: new shops, services and hospitality in existing branches, driving our online and convenience businesses, deepening relationships with customers through the myWaitrose card and, of course, staying ever-focused on fabulous products and top-notch service.”

The 20 Fastest Growing Retailers in the UK:

  1. Aldi (UK & Ireland)
  2. Waitrose
  3. Sports Direct
  4. Primark
  5. Burberry
  6. John Lewis
  7. Home Bargains
  8. B&M Retail
  9. ASOS
  10. JD Sports
  11. Poundland
  12. Ocado
  13. The Range
  14. AO.com
  15. Net-a-porter
  16. Harrods
  17. Screwfix
  18. Costcutter
  19. Poundworld
  20. Dunelm Mill

The 10 fastest growing retailers in the West (the UK, US, France, the Nordics, Germany and the Netherlands):

  1. Apple
  2. Amazon
  3. Casino
  4. Costco
  5. Aldi Group
  6. 7-Eleven
  7. eBay
  8. Jumbo
  9. TJX Companies
  10. Inditex