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The Rise of The Budget Retailers
Date Posted: 08/04/2010
The budget retailer in the UK is by no means a new concept; indeed many high streets, retail parks and shopping centres have seen a slow emergence over the last couple of decades. It is only now however that we are seeing this growth occur at an exponential rate. The variety market is dominating the discount sector in terms of expansion with retailers such as B&M, Poundland and Home Bargains actively seeking new sites. The food market being what it is will always remain resilient, however the big four supermarket chains experienced a rude awakening when Lidl and Aldi started to take some of their market share away as they embarked on a UK-wide expansion program.
Views and stereotypes are changing. Landlords perhaps once concerned about the image that was portrayed from having a discount retailer on a scheme, are quick to reconsider given the possibility of facing an empty rates bill and the security of a strong retail covenant that many of these retailers now bring.
Indeed the success of many discount retailers has come in part by them taking occupancy at prime retail sites on the high street and retail parks. Primark have cemented their reputation as a retail phenomenon who have maintained their position as market leader in a decade where the major supermarkets have invested heavily in the non-food part of their business. Retailers such as these, New Look and Poundland are perfectly placed to capitalise on what many are struggling to do - offer a cheaper alternative to an increasingly financially conscious public, without them having to sacrifice on quality.
Budget retailers are also seeing previously unseen demographic groups come through their doors. Status in society is important for many; we are perceived by the way we look, where we live, where we work and even by where we shop. However, any social stigma that may once have existed on choosing a budget retailer over one of the big 4 supermarkets quickly gets set aside 6 months into a redundancy with a family to support and mortgage to pay. We have always been a nation of bargain hunters but now it's borne out of necessity rather than choice.
Some critics have been quick to suggest the success of the budget retailer will be short-lived; that consumers will revert back to old (higher-end) spending habits as we come out of the recession. Time will tell, but what has certainly happened is that consumers have become wiser to their finances. Nobody wants to pay over-inflated prices for a product you can get for half the cost at similar or same quality. Discounting does not necessarily mean lower quality and higher end retailers will need to come up with innovative ways to draw footfall back into their stores.
Whether it's a slow or fast recovery, it's safe to assume that as long as Joe Public wants a bargain, the budget retailers are here to stay.