Is Aldi and Lidl really eating the supermarkets’ lunch?

The Motley Fool recently reported that “Shoppers have defected to the hard discounters Aldi and Lidl” (http://is.gd/YfraYm); repeating a common argument that I have been hearing a lot lately.

To see if this might be true, I added up the revenues of each of the listed supermarkets MRW SBRY and TSCO (I’m sure you all know the company names attached to the EPICS) in their reported years:

        2012   2013   2014
 MRW   17663  18116  17680
 SBRY  22294  23301  23944F
 TSCO  64539  64826  63557
      ------ ------ ------
 SUM  104496 106243 105181

The latest revenues for SBRY were forecast figures.

You will see that, despite the combined revenues in 2014 being lower
than 2013, they were actually 0.7% higher than 2012. So there doesn’t
seem to be any compelling argument that supermarkets are ceding their
positions to the Aldi’s and Lidl’s of this world. It could simply be
that the stagnant revenues are the result of price competition amongst
the main players. Oligopolies are usually very difficult to displace,
and it could be that their current practice benefits them in the
long-term by making it uneconomic for smaller rivals to compete. That’s
a purely speculative argument, of course.

The revenues are not adjusted for inflation. This could be a
significant factor, as it would then suggest that the revenues only
*look* stable on the surface, but are actually deteriorating due to
some other factor (like Aldi and Lidl).

BWTFDIK

I don’t any supermarket shares.

 

 

Advertisements

About mcturra2000

Computer programmer living in Scotland.
This entry was posted in Uncategorized. Bookmark the permalink.

2 Responses to Is Aldi and Lidl really eating the supermarkets’ lunch?

  1. red says:

    Excluding international sales, particularly for Tesco? A useful metric might be sales per square foot in the supermarket/hypermarket segments. Large fixed cost base, so very small variance in UK revenue per square foot can mean the difference between between health and tragedy (or perhaps comedy).

  2. I would definitely buy Lidl, given the chance. As well as low prices they provide some additional value at no cost to themselves: a short queue is a bonus, rather than an expectation; the staff look unharassed by corporate culture, and judging by their calibre I get the feeling that the wages are better than the norm; finding a particular product is a bonus, not an expectation; you don’t feel that you’re constantly being pandered to.
    Obviously some of those things need a certain mental outlook to appreciate.
    But I think it shows how micromanagement need not move you forwards. The big stores have somewhat painted themselves into a corner.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s