RISING food costs are driving shoppers to search for bargains at so-called grocery discounters such as Aldi and Lidl.
Both German-owned chains are rapidly growing market share in the UK where the "big four" – Tesco, Asda, Sainsbury's and Morrisons – once reigned over the weekly shop.
New figures from research firm TNS Worldpanel said discounters accounted for 5.
9 per cent of grocery spending in the 12 weeks to 13 July, with Aldi and Lidl growing at 20 per cent and 14 per cent respectively compared with the same period last year.
Markus Beher, managing director of Aldi in Scotland, told The Scotsman the chain was benefiting from cost-conscious shoppers looking to spend a little less.
"The economy and its situation is certainly helping us, and driving people to us," he said. "I would say more and more consumers now realise they have to be more careful with their money and where they spend it.
"When they come to us they can get the quality they are used to if not better, but they can save 20 to 30 per cent on their shopping compared to the big four supermarkets."
As more people come through the door at Aldi, which currently has 36 stores in Scotland, Beher says they get the chance to overturn "preconceptions" that discount retailers are downmarket.
"We are successful at converting people. The big task is getting people in for the first time."
Unlike some of its discount competitors, Aldi produces its own-brand items, from ketchup to night cream. Most of its products, with the exception of Milano salami and Parmesan cheese, are sourced from the UK. In Scotland, Aldi has nearly 40 suppliers including Taypack and Kingdom Bakers in Fife.
Beher insists Aldi may sell it cheap but it doesn't compromise on quality. Aldi surprised the market in May when its own-brand night cream was declared a joint favourite by TV fashion guru Gok Wan on his Channel 4 programme How to Look Good Naked.
Beher admits inflation has driven Aldi's prices up but he says prices at the big four are going up faster.
"We constantly monitor the difference to the multiples of the cost of a typical basket. Over the last year the difference has actually grown a bit.
"We don't use an increase in raw material to hide another little price increase to bolster our margin."
Aldi plans to build at least ten stores a year in Scotland, investing about £36m in 2008. It plans to open its first store in Edinburgh in 2009.
In Germany, where the discounters market share is as high as 40 per cent, Beher sees lots of room to grow.
"There is no reason why the market share here couldn't grow much further than it is now. Maybe 40 per cent is a little too optimistic. "The more customers we get in, the more we will be able to grow our share."
The full article contains 496 words and appears in The Scotsman newspaper.
