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The Way Of Target

Whats Your Target And Shoppers

By umer aliPublished 2 years ago 3 min read
The Way Of Target
Photo by Annie Spratt on Unsplash

The Way Of Target stores is probably a foretaste of what may be in store for Aldi's fellow German discount grocer Lidl, which is currently building stores in the US. Lidl's discount prices helped it deliver surprisingly strong growth in the UK in its first full year of trading and in the US it is seen as a threat to Aldi.

UK consumers have been tightening their belts this year as inflation has surged - up from 1.8% to 2.9% in August - while wage growth has slowed.

Aldi will be hoping that Tesco's customer service and range of more than 6,000 products will make it an even more attractive proposition for British shoppers, whose shopping habits have been disrupted by the rise of discount retailers like Lidl and the discounters, Asda, Morrisons, Sainsbury's and the Co-op.

Since the UK voted to leave the European Union on 23 June last year, the value of the pound has slumped, pushing up the cost of imported food and goods, including most of the products sold by Tesco.

The food price index in the first seven months of the year, up to 28 August, showed an annual rise of 1.6%, the sharpest increase since December 2013.

In the US the chains have resisted having another competitor, partly because there is little overlap between the markets, and partly because some customers may confuse the two chains. Both brands are popular in Germany and both are known for their colourful store layouts and competitive prices. But like other discount chains in Europe, both Lidl and Aldi have seen their market share erode in recent years and they are under pressure to match the aggressive pricing of the discounters Lidl and Aldi, known as "masterfactory" for the quality and cost control of their brands.

Store Upgrades

Lidl opened its first American stores in 2006 and currently operates about 20 locations in California, Pennsylvania, New Jersey and Virginia. Aldi opened its first American store in 1984 and currently has more than 1,600 U.S. locations, according to the companies' websites. In its stores, Aldi has avoided the store-in-store concept because the company considers it a temporary move, said Roger Kimmelman, senior vice president and partner in the retail practice of consultant Kantar Retail.

Shopper traffic and sales at Lidl and Aldi stores have been rising in the U.S. in the first months of the year, according to research firm Conlumino. But the growth of the discounters may slow in the next couple of months as warmer temperatures make it harder for shoppers to take advantage of their offer of deeply discounted prices on barbecue food.

At Wal-Mart, revenue rose at an annualised rate of 3.8 per cent in the three months through January compared with the year-earlier period. That is the slowest pace of growth since early 2016, when Wal-Mart changed its payment card policy, affecting its customers in the U.S., Mexico and Puerto Rico, and temporarily curtailing online sales growth.

Target stores close in Suffolk and Kent

Major British supermarkets have said they have had to close two of their stores in Suffolk and Kent, because they are not big enough to take the extra stock that has arrived with the Beast from the East.

Tesco, Morrisons and Asda all confirmed they had closed two of their outlets in Haverhill and Chatham on Thursday because the demand for their food had outstripped the number of trolleys they could clear.

Other stores had more trolleys than customers, Tesco said.

Meanwhile Asda said customers were queuing for up to an hour outside its Chatham store.

At the height of the snow crisis, Asda tweeted: "Customers are queuing for our stores. Chatham is closed & Haverhill is operating a limited service."

A Tesco spokesman said its Haverhill store had reopened on Thursday evening, but that it was too early to say how long the Chatham store would remain closed.

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    umer aliWritten by umer ali

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