More shoppers are heading for the discount food stores

The latest shopper research from industry group IGD shows the number of shoppers going to discount stores such as Lidl and Aldi has increased over the last year and is set to grow further.

Shoppers in Yorkshire and the North are using discounters far more than shoppers in London and the South East, reflecting the increasing North-South divide, the subject of the Yorkshire Post’s Fair Deal campaign.

According to IGD far fewer Londoners have used a discounter in the last month. While just 24 per cent of Londoners and 35 per cent of people living in the South have visited a discounter, 43 per cent of people living in Yorkshire and the North have been to one.

This is second only to Scotland where 44 per cent of people are going to discounters.

The latest IGD statistics back up the finding of Asda’s latest Income Tracker. Asda said family spending power in Yorkshire fell 16 per cent in the three months to September, down from £103 to £88, making it the second hardest hit region in the UK after Northern Ireland.

Analysts believe the North-South divide is splitting the country.

“The North-South divide has widened with only London and the South East better off than the UK average,” said analyst Dave McCarthy at Evolution.

According to IGD, 46 per cent of shoppers say they would use food discount stores more in the future if there was a shop near where they work or live.

The monthly survey among 1,000 shoppers also found that 26 per cent will use food discount stores more in the future.

Joanne Denney-Finch, chief executive, IGD, said: “Discounters still account for a very small proportion of the market overall, but they might be expected to do well during an economic downturn, with 60 per cent of shoppers telling us that they will use them more if their personal economic circumstances get worse.

“Shoppers also say that perceptions of discounters have changed over the years, with 81 per cent of regular discount food shoppers believing that the quality of products has improved.”

IGD estimates that the discount grocery market was worth around £6.4bn at the end of 2010.

In a notable shift, five per cent of shoppers said they use discount stores for their main grocery shopping trip, up from three per cent in September 2010.

Younger shoppers and those with teenage children are the more likely to use discount stores.

Nearly two thirds, 64 per cent, of shoppers aged between 18 and 34 said they would use discounters if there was one near them. This compares with just 37 per cent of shoppers aged over 65 who would visit a local discounter.

Younger shoppers who are struggling to make ends meet tend to have less of a loyalty to store brands than pensioners.

Nearly two thirds, 62 per cent, of shoppers with teenage children said they would shop at a discounter if there was one near them, compared with just 43 per cent of shoppers with no children.

Over half, 52 per cent, of shoppers with children of any age said they would use discounters more if there was one near them, reflecting their larger than average grocery bills. Teenagers tend to eat more than younger children.

IGD said that nearly a third of shoppers, 32 per cent, believe food will be “much more expensive” over the next 12 months, up from 25 per cent the same time last year.

Ben Miller, head of shopper insight, IGD, said: “Shoppers are now using a range of techniques as they hunt for value. They are now prepared to sacrifice more time and put in more effort in order to maintain their food quality for the best price.

“Household incomes are being squeezed on several fronts, such as utility and fuel price increases.

“Shopping around is one way shoppers are putting in more effort into their food and grocery shopping, visiting more shops of different types, and that includes giving food discounters a try.”

Retail sector shedding jobs

The number of retail jobs fell by 23,000 in September compared with the same month last year, as the tough economic conditions take their toll.

The British Retail Consortium said employment in the three months to September was down by 5,780, the biggest quarterly fall for two years, despite an increase in the number of shops.

There were more than 1,100 extra shops in the UK over the period, almost entirely driven by grocery retailers.

A study of firms employing a million workers showed that just over half of retailers planned to take on staff in the run-up to Christmas, down from 61 per cent last year, while a third said staff levels will be kept the same and eight per cent feared they would lay people off.

Employment intentions were more upbeat in the grocery sector than in non-food retailing.

Stephen Robertson, director general of the BRC, said: “With consumer spending now in recession and retail sales volumes declining, this is the biggest drop in overall retail employment in the two years since we began this survey.

“Redundancy rates are thankfully low but many retailers are not filling every vacancy.

“Uncertainty and fears about Christmas trading may also be leading retailers to delay taking on this year’s seasonal staff.

“Supermarkets’ continued expansion into convenience store formats means food retailers are still adding new jobs, but even that is slowing. This is all crucial evidence that imposing extra burdens on businesses doesn’t come without costs.

“It results in fewer jobs in a sector which has previously been a consistent job creator. The Chancellor must use his autumn statement to restore confidence and jobs growth. Part of that should be a moratorium on new employment regulation.”

Christina Tolvas-Vincent, head of retail employment at business law firm Bond Pearce, which helped with the report, said: “Retailers are being battered by the same economic conditions that have led to the highest unemployment rate for 17 years. There is no doubt it’s tough out there but retailers are showing their determination to hold on to market share by keeping redundancies low and riding out the storm as best they can.”