Myth-busting research points to a bright future for discounters

This long-awaited evidence comes in the form of the inaugural 'Discounter Report 2008' from respected customer tracking specialists him! Over a two-month period they questioned around 1,800 shoppers face to face at the stores of Netto, Aldi, Lidl and Iceland and the results are a myth-dispelling document.

First myth up is that discounters are filled with students. First myth busted, because the reality is that they make up only three per cent of shoppers. Second myth up is the belief that discounters act as wholesalers for small businesses, which is also busted as only one per cent of customers fall into this camp.

Another myth is the stigma issue surrounding the discounters whereby people would never admit to using such stores. However, the him! findings reveal that 94 per cent of shoppers would recommend the discounters' stores to their friends and family. Clearly the experience in these outlets is not as bad as the myths suggest.

But probably the biggest of the myths to be blown out of the water is that discounter supermarkets are only used for occasional purchases. This is simply not true. In the case of Netto the average frequency of visits is two per week, which is in-line with the major grocers.

And when they visit, these shoppers are not just popping in for a pint of milk or a bag of sugar. It is for an average of 10 items, which compares with an average of only three at Co-op shops and the typical convenience store. It is clear that many people are using discounters' stores for their major weekly shop as well as for top-ups.

What is less of a surprise from the research is that shoppers choose to visit discounters mainly because of price. But what is pleasing is that it is closely followed by value-for-money and then quality. The latter is of more concern to shoppers than the width of the ranges available, which suggests that the limited ranges of the discounter's is possibly less of an issue than had been believed. Maybe, this is also because in the case of Netto we've sought to address the point by stocking increasing numbers of branded lines.

Much has been made in the media about shoppers flocking to the discounters as they abandon the major supermarkets in a search for lower prices. This is only true to a certain extent as just eight per cent of shoppers are new to the discounters' stores in 2008. Yes, there is a trend here but it is not as widespread as the media is portraying, which suggests that the discounters' customers are loyal and unlikely to be returning to another supermarket when their financial situation eases.

Another good indicator for the future is the expectation of 24 per cent of shoppers that they will spend more with the discounters over the next 12 months than they do currently. Compounding the 25 per cent who already say that are buying more for the discounters than they were a year ago.

So not only can we look forward to a pretty good future but hopefully this research can now be used as a tool to help the discount sector escape from the misconceptions that are still held by some British shoppers.

Mike Hinchcliffe, marketing manager, Netto Foodstores