VIDEO: ‘Big Four’ UK grocers will take fight to discounters in 2015 - JLL

The UK’s largest food retailers, Tesco, Morrison’s, Asda and Sainsbury's, are not willing to surrender more of their 75% market share and will push back against advances by discounters such as Aldi and Lidl this year, according to Tim Vallance of JLL.

'2015 will be a transitional year in which we are going to see a fightback from the "Big Four",' Vallance, head of UK Retail & Leisure at JLL, said in a video interview following the release of JLL's 2015 Property Predictions for the UK.

Tesco, Vallance said, still holds 28% of the UK grocery market, and with main rivals Morrison’s, Sainsbury and Asda combined, the four hold 75% of the market.

'They are not going to let go of that anytime soon even though there has been a lot of commentary in the press, especially from analysts, about the rise of the discounters in all the retail sectors, particularly in food retail.'

The two main food discounters are Aldi and Lidl from Germany. 'However,' Vallance said, 'they only hold 8% of the market and while this has grown very quickly over the last 12-15 months it is "really slowing".'

Vallance explained that there are several reasons why the four major largest retailers can launch a fightback which could further stem the growth of these discounters. 'The discounters are discounting by investing in price. The "Big Four" can do that too as they have huge pockets. But it's not just about price investment; it's also about provenance - it's about good service and it’s about variety. The "Big Four" can offer that and the discounters can’t.'

VIDEO
Tim Vallance, JLL on the "Big Four" food retailers versus the discounters


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For more comments on UK retail, see JLL's UK Property Predictions landing page and Tim Vallance's contribution.