By 2022 the number of retail outlets, operated by both the retailors will be doubled.

In the upcoming
years Aldi will be bigger than a combination of Tesco, Sainsbury’s and Morrison’s. It is because of this
reason that growth is so rapid in the grocery sector. With increase in sales, a store owner accumulates
money to open more outlets, with better goods and increased advertising.

The chief executive of Tesco Dave Lewis, has raised concerns regarding the fact that Aldi and Lidi
promotional expenditure exceed those of the rest of the industry. Lidl marketing expenditures are at
£5.9m which is an increase of 160 pc from last year in comparison to Asda and Aldi which spent £4m and
£3.5m respectively.

While the top four are in a competitive cycle the retailors are in a harmonious cycle.

The issue for Tesco and co is that the measures taken to reduce expenditure to improve their balance
sheet result in more benefits for the retailors.

Reduction in the marketing and advertising serve as an example but similar steps have been taken in the
decrease in the variety of goods that are available in major outlets.

Goods which are being sold by a third at Tesco outlets, will be reduced. It will allow the discounters in
becoming more effective however buyers will have lesser options. Rather than focusing on competitors
like Warburtons and Hovis, Tesco is cutting out one of its products i.e. Kingsmill bread.

In all fairness Coupe admitted that the retailors were “tough rivals”.

Sainsbury predicts that it will dominate the grocery segment by 2022. This is an increase of 9.2 pc
currently and depicts an increment in the revenue by 63 pc in the upcoming seven years.

There will be a drastic change in the market. Discounters, apart from Aldi and Lidl, shall take over the
additional market share which essentially include-supermarkets considering the present direction-
resulting in problems for established brands. An example can be seen in Aldi buying five of Co-operative
big outlets while Lidl buying the remaining one.

It’s only a start of the battle between the top four in Britain. In 1990 Aldi first arrived in the UK and has
since spent 25 years, amidst ups and downs, in establishing itself in the UK market. They will certainly
not give up that easily.