The advance of German discounters Aldi and Lidl is likely to continue this year, although it seems deflationary pricing pressures are starting to abate for the UK’s supermarkets. It’s predicted that grocery discounters will still take market share, albeit via new store openings as wider inflationary trends play out across this part of the retail industry. This could give a bit of breathing space to Britain’s ‘big four’ – Asda, Tesco (TSCO), Sainsbury's (SBRY) and Wm Morrison (MRW) – as the competitive environment eases slightly.
That’s not to say that these companies don’t face an enormous task. As last year's major tie-up between Sainsbury’s and Argos demonstrates, customers’ expectations regarding convenience and product availability are higher than ever. This will require significant investment by the grocers in their distribution capabilities, online interaction and customer engagement.
The Amazon question