New report reveals why FMCG products significantly contribute to discount store growth

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4th October 2017 17:20 - FMCG

New report reveals that FMCG products contribute greatly to discount store growth

New report reveals why FMCG products significantly contribute to discount store growth: The UK Discounters 2017-22 report, released in September, details the mass growth of discounted stores, while commenting on consumer needs. 

According to the report, the discounter market (which includes stores such as Aldi and B&M) has increased by 72.4 per cent, since 2012 and is expected to rise by 36.1 per cent (an extra £8.6 billion) within the next five years. 

The report states that the average shopper spends around £24 instore, with Food & Grocery and Health & Beauty being the top categories for shoppers. The high volume of purchases as well as impulse buys within these two categories is mainly due to the necessity of FMCG products, their low product prices, and short replacement cycles.

Yet, the report also detailed what barriers are faced when consumers shop at discounted stores. The majority of consumers said that not having a discounted store nearby is the main reason why they do not shop there. Other key barriers of growth are mainly circulated around consumer perceptions of discounted stores regarding “low quality of products, small and inconsistent ranges, negative shopping experience”.

 

Additionally, the report stated that:

·       28.9 per cent of consumers are unable to do a full shop

·       23.3 per cent of consumers do not enjoy the instore experience

 

Following this, the report advises discount stores not to focus on customer service as 65.7% of consumers are willing to overlook instore experience, however 55.6 per cent said that good customer service is an area worth focussing on.

In addition to plans for expansion, diversification of range of products and improved instore experience, stores have also been advised to improve instore experience via their click and collect features on their website. Thus, making it easier for customers to gain access for products currently not available in the store at the time. 

Currently, discounted stores are worth £23.9 billion per annum and are set to rise to £32.5 billion by 2022. Also, Aldi have been identified as providing the best instore experience to customers due to their wide range of products. 

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