Frills or no-frills?

Currently, U.K. food retailers are in a bit of a spin. They’re finally waking up to the fact that German discounters Aldi (owner, among other things, of Trader Joe’s in the U.S.) and Lidl are stealing their sales of cured meat, fresh vegetables and almost anything else you might care to put in your mouth that’ll taste good. Brits, it appears, have worked out that it’s cheaper to buy their food from a discount retailer than a normal supermarket.

No surprises there, perhaps, but what is interesting is the reaction of those a little further up the (apologies) food chain. A number of the larger players in the U.K. food retail business – Tesco, Asda and Morrisons – have reacted to the growing popularity of the discounters by starting a price war among themselves where the lowest price wins. The idea is that they’ll take on the discounters mano-a-mano and beat them at their own game. All well and good, but this sort of thing comes at a price and the price is the way stores look.

U.K. supermarkets are, for the most part, pretty decent places to shop and over the past few years, a fair amount of money has been expended on making them so. The problem is that you can’t have a good looking shop where ‘experience’ really forms part of the equation and ultra-low prices without sacrificing something on the altar of declining profits.

The British consumer is faced with a choice – good looking stores or low prices? Maybe you can have both, but it does seem pretty unlikely. In truth, there is probably room for both forms of retailing and with a recovering economy the discounters may not exert quite the pull they have up to now. We all like to feel good when we shop, but what price are we prepared to pay for this?  

John Ryan is a journalist covering the retail sector, a role he has fulfilled for more than a decade. As well as being the European Editor of VMSD magazine, he writes for a broad range of publications in the U.K., the U.S. and Germany with a focus on in-store marketing, display and layout, as well as the business of store architecture and design. In a previous life, he was a buyer for C&A based in London and then Dusseldorf. He lives and works in London.