In the UK, the ongoing price war between Tesco, Asda, Sainsburys and Morrisons has, in part, been sparked off by discount stores encroaching upon their market share.
It is not just the British stores that are having trouble with the likes of Lidl and Aldi, across Europe they are bagging bigger and bigger shares in the markets.
Germany is the home of both Aldi and Lidl, so it is not surprising that they have a big share of the market there. The country saw a similar war that we are having here twenty years ago, as the discounters rose in power and sliced away chunks of the market that belonged to the big stores.
In Germany however, as the dust of the price wars settled, Aldi and Lidl were left clutching almost 40% of the market.
Aldi and Lidl also muscled across the border and have secured a footing in the French market. But the French market is not as cutthroat as here in the UK, and there are many more regulations there than there are here, restricting selling at a loss through deals, as well as restricting opening times of big stores.
In times of stress and financial worry, it is not surprising that people want to pay less money to fill their fridge, and so the discounter become very appealing. Assuming no strict regulations are introduced, this price war could go any number of ways. A recovery by the big four supermarkets could happen, or the discounters could continue to gain ground and end up owning a huge portion of the market.
