New research from IGD has revealed that variety discounters, including Home Bargains, B&M, Poundland, Wilko and other smaller players, will be worth £12.6 billion by 2022, up from £11.1 billion in 2020.
The channel’s growth of 6.8 per cent per year is four times that of the overall UK food and grocery market.
In January 2021, 66 per cent of British shoppers claimed to have visited a variety discounter in the preceding four weeks to buy food and groceries. While the number of shoppers using them has also increased since May 2020.
IGD expects usage of variety discounters to increase further when lockdown restrictions ease. Their research shows that families are most likely to shop in the channel (40 per cent of variety discount shoppers have children living at home), predominantly driven by the perception that it can help them to save money.
Lucy Ingram, retail analyst at Retail Analysis, IGD says: “While toiletries, non-grocery household products and snacks are still most commonly found in variety discounter baskets, household grocery products are appearing more than they did a year ago. As a result, variety discounters are adapting their ranges.
“In 2020, we saw a revival of the frozen category as shoppers stocked up for lockdowns and this could remain a popular category for the channel, given the lack of complexity in the supply chain. There is a focus on appealing to different meal occasions – breakfast, lunch and dinner – which could be an opportunity to provide low-priced solutions, such as meal kits, to combat the cooking fatigue driven by the part-closure of the eating out market. Strengthening the private label offering could also be an important area; it’s an efficient way for variety discounters to innovate and offer differentiation.
“In-store shopping at variety discounters is likely to remain the preference for both the consumer and the retailer. Online retail presents both a challenge and an opportunity; the significant investment required doesn’t fit well with the variety discounter operating model, but click and collect and third party partnerships could emerge.”
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