SHOPPERS at Walmart and Target could continue to see prices rise – as more customers flock to Aldi and Lidl to get their discounts.
Discount grocery brands have seen signs of growth in an inflationary economy as shoppers seek to cut food costs.
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aldi and lidl They are continuing an aggressive push into the US market and are seeing positive results.
Consumers saved money on food at discount retailers.
According to a white paper produced by Coresight Researchthe trend of discount purchases is expected to continue in 2023.
Due to inflation-driven frugal shopping behaviors, we believe discount channel growth will continue to outpace the total. [grocery] growth in 2023 and beyond,” the document states.
Meanwhile, grocery shoppers from brands like Walmart and target may see higher costs due to lower margins.
Discount retailers have been on a tear
More and more people are shopping at discount brands – and grocers are flooding the market with cheap foods.
This new customer behavior is seen as a smarter financial decision, as shoppers wallets are getting smaller in a tight economy.
Small discount stores like Aldi and Lidl were caught off guard at the start of the covid pandemic.
Because brands hadn’t built much of their retail space online, they were ill-equipped to manage an economy that had gone virtual.
In 2020, the total growth of the discount grocery retailer segment was lower than that of big box retailers offering more online.
As consumers re-entered stores, discount retailers tapped into new markets they hadn’t reached before.
According to the study, 86.3% of low-income shoppers, 48.2% of middle-income shoppers and 17.6% of high-income shoppers now shop at discount grocery stores.
34.7% of consumers said they would shop more and more at discount stores if inflation persists.
These brands are continuing an aggressive push into these markets.
General dollar plans to open 1,050 new stores in 2023 and dollar tree added 200 stores in the United States in the third quarter of 2022 alone.
Problems ahead for department stores?
The report also warned of rising costs for large retailers as pesky inflation persists.
These costs are likely to be passed on to customers, making shopping at these brands more expensive.
walmart And Target has raised prices on many of its products – a product of inventory gluten, inflation and self-imposed costs with automated checkouts.
The consumer shift to discount retailers has anticipated major changes in the grocery market.
Kroger and Albertson’s brands attempted a merger – they say to cut costs.
The merger was hailed by experts and prompted a US Senate investigation.
Rodney McMullen, CEO of Kroger, cited the growth of the discount market in his statements to the Senate Antitrust Subcommittee.
“When I joined Kroger, the average family bought most of their groceries on a weekly trip to their neighborhood store,” he told the committee.
“The industry today is larger, more complex and more competitive, with nearly endless opportunities and options for where and how to shop.”
“Customers buy food everywhere, from Walmart and Trader Joe’s, to Costco and Aldi, to Dollar General, 7-Eleven, Walgreens and restaurants, for example. Notably, almost all of the competitors I just named are non-unionized .”
The Coresight report suggests these brands are offering discounts to loyal customers and looking into their online offerings.
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