Categories
Coupons & Offers

Backing a discount retail cash generator

  • Pre-tax profit surges 21 per cent to GBP16.4m.
  • Revenue from vaping and sports nutrition segments soar both over 36 per cent.  
  • Earnings accretive small acquisitions.
  • Board eyeing up European expansion opportunities.

Supreme (SUP:203p), a distributor and manufacturer that sells a range of products to discount retailers and supermarkets (B&M, Home Bargains, Poundland, Morrisons and Sainsbury's are all customers) has produced eye-catching maiden results. Buoyed by the success of its vaping brand, 88vape, the market leader in the UK with a 30 per cent market share, group adjusted pre-tax profit surged 21 per cent to GBP16.4m on a third higher revenue of GBP122m in the 12 months to 31 March 2021. The vaping segment increased revenue by 36 per cent to GBP39.5m growth (all organic), of which a maiden nine-month contribution from a contract award from HM Prison & Probation Service accounted for GBP10m of the total and higher margin online sales around GBP6.5m.

More than 1m vapers now use the product regularly, a price point of 100p per 10ml bottle explains exactly why as 88Vape is by far the most affordable e-liquid brand of scale in the UK - the average price is nearer GBP3 per bottle across the industry - thus creating a competitive moat in what remains a high growth sector. It's highly profitable, too, as highlighted by a divisional gross margin of 41 per cent. Analysts at Euromonitor expect the vaping sector to grow at a compound average growth rate of 11 per cent through to 2024, one reason why house brokerage Berenberg believes Supreme's vaping segment can grow gross profit by 12 per cent to GBP18.5m this year to account for half the group total.

If anything, that looks conservative given that Supreme will launch in 400 large Sainsbury's stores in mid-August which will sell the e-liquid in four packs. If successful, a roll-out across the supermarket's chain of 1,413 stores is the next step. Supreme's sports nutrition business has been transformed by last autumn's GBP1m acquisition of GT Divisions, a business that markets and sells a range of low sugar high protein bar snacks under the brand of Battle Bites with production outsourced to a third party.

The snacks are sold at a competitive price of GBP1.25, significantly below that of incumbent producer Grenade bars (GBP1.99 to GBP2.99). Supreme has recently entered the vitamins market, launching its low-cost supplements online brand Sealions this week and has created another brand, Millions & Millions which launches in September with Davina McCall as brand ambassador. The small acquisition of sports nutrition and supplements brands SCI-MX and PRO2GO earlier this month is described by entrepreneurial group chief executive and 56 per cent shareholder Sandy Chadha as "the best acquisition I have ever done." Supreme has purchased GBP1.3m stock from a business that previously was generating GBP8.5m of annual revenue and could bring 70 per cent of manufacturing in-house to improve its profitability.

It's not the only smart deal Supreme has made since IPO in February, the new listing of shares was backed by shrewd fund managers at Slater Investments, Blackrock, Premier Miton, Jupiter and Canacord Genuity. Last month, the group purchased a leading Dublin-based distributor of batteries and lighting products for a maximum consideration of EUR1.8m, or three times annual cash profit, thus giving Supreme access to the Irish market, the ability to cross-sell its other product categories, and creating an export hub to target expansion in Europe. Chadha is looking at further overseas expansion opportunities in the lighting market.

With net debt of GBP7.5m set to be wiped out this year, the group can easily afford to recycle the strong internal cash flow generated from its asset light business model into more earnings accretive acquisitions. Berenberg is pencilling in 10 per cent higher adjusted pre-tax profit and earnings per share (EPS) of GBP18.1m and 13.2p, respectively, in the new financial year, forecasts which look too low in my view, rising to GBP20.9m and 15.2p in 2022/23. Moreover, with the board committing to a 50 per cent pay-out ratio, there are attractive prospective dividend yields of 3.3 per cent and 3.8 per cent on offer, too.

A forward price/earnings (PE) ratio of 13 for the 2022/23 financial year is low in relation to the earnings growth predicted - 12.5 and 15 per cent, respectively, for the next two financial years - and for a company that offers a free cash flow yield of 7.5 per cent. Trading on five-point discount to its peer group PE ratio average, I reiterate the target price of 250p I outlined when I initiated coverage (Alpha Research: 'Tap into a discount cash generator', 27 May 2021). Buy. ?

Simon Thompson's latest book Successful Stock Picking Strategies and his previous book Stock Picking for Profit can be purchased online at www.ypdbooks.com, or by telephoning YPDBooks on 01904 431 213 to place an order. The books are being sold through no other source and are priced at GBP16.95 each plus postage and packaging of GBP3.25 [UK]. Promotion: Subject to stock availability, both books can be purchased for the promotional price of GBP25 with free postage and packaging.

They include case studies of Simon Thompson's market beating Bargain Share Portfolio companies outlining the investment characteristics that made them successful investments.

Simon also highlights many other investment approaches and stock screens he uses to identify small-cap companies with investment potential.

Details of the content can be viewed on www.ypdbooks.com.

Categories
Coupons & Offers

Backing a discount retail cash generator

  • Pre-tax profit surges 21 per cent to GBP16.4m.
  • Revenue from vaping and sports nutrition segments soar both over 36 per cent.  
  • Earnings accretive small acquisitions.
  • Board eyeing up European expansion opportunities.

Supreme (SUP:203p), a distributor and manufacturer that sells a range of products to discount retailers and supermarkets (B&M, Home Bargains, Poundland, Morrisons and Sainsbury's are all customers) has produced eye-catching maiden results. Buoyed by the success of its vaping brand, 88vape, the market leader in the UK with a 30 per cent market share, group adjusted pre-tax profit surged 21 per cent to GBP16.4m on a third higher revenue of GBP122m in the 12 months to 31 March 2021. The vaping segment increased revenue by 36 per cent to GBP39.5m growth (all organic), of which a maiden nine-month contribution from a contract award from HM Prison & Probation Service accounted for GBP10m of the total and higher margin online sales around GBP6.5m.

More than 1m vapers now use the product regularly, a price point of 100p per 10ml bottle explains exactly why as 88Vape is by far the most affordable e-liquid brand of scale in the UK - the average price is nearer GBP3 per bottle across the industry - thus creating a competitive moat in what remains a high growth sector. It's highly profitable, too, as highlighted by a divisional gross margin of 41 per cent. Analysts at Euromonitor expect the vaping sector to grow at a compound average growth rate of 11 per cent through to 2024, one reason why house brokerage Berenberg believes Supreme's vaping segment can grow gross profit by 12 per cent to GBP18.5m this year to account for half the group total.

If anything, that looks conservative given that Supreme will launch in 400 large Sainsbury's stores in mid-August which will sell the e-liquid in four packs. If successful, a roll-out across the supermarket's chain of 1,413 stores is the next step. Supreme's sports nutrition business has been transformed by last autumn's GBP1m acquisition of GT Divisions, a business that markets and sells a range of low sugar high protein bar snacks under the brand of Battle Bites with production outsourced to a third party.

The snacks are sold at a competitive price of GBP1.25, significantly below that of incumbent producer Grenade bars (GBP1.99 to GBP2.99). Supreme has recently entered the vitamins market, launching its low-cost supplements online brand Sealions this week and has created another brand, Millions & Millions which launches in September with Davina McCall as brand ambassador. The small acquisition of sports nutrition and supplements brands SCI-MX and PRO2GO earlier this month is described by entrepreneurial group chief executive and 56 per cent shareholder Sandy Chadha as "the best acquisition I have ever done." Supreme has purchased GBP1.3m stock from a business that previously was generating GBP8.5m of annual revenue and could bring 70 per cent of manufacturing in-house to improve its profitability.

It's not the only smart deal Supreme has made since IPO in February, the new listing of shares was backed by shrewd fund managers at Slater Investments, Blackrock, Premier Miton, Jupiter and Canacord Genuity. Last month, the group purchased a leading Dublin-based distributor of batteries and lighting products for a maximum consideration of EUR1.8m, or three times annual cash profit, thus giving Supreme access to the Irish market, the ability to cross-sell its other product categories, and creating an export hub to target expansion in Europe. Chadha is looking at further overseas expansion opportunities in the lighting market.

With net debt of GBP7.5m set to be wiped out this year, the group can easily afford to recycle the strong internal cash flow generated from its asset light business model into more earnings accretive acquisitions. Berenberg is pencilling in 10 per cent higher adjusted pre-tax profit and earnings per share (EPS) of GBP18.1m and 13.2p, respectively, in the new financial year, forecasts which look too low in my view, rising to GBP20.9m and 15.2p in 2022/23. Moreover, with the board committing to a 50 per cent pay-out ratio, there are attractive prospective dividend yields of 3.3 per cent and 3.8 per cent on offer, too.

A forward price/earnings (PE) ratio of 13 for the 2022/23 financial year is low in relation to the earnings growth predicted - 12.5 and 15 per cent, respectively, for the next two financial years - and for a company that offers a free cash flow yield of 7.5 per cent. Trading on five-point discount to its peer group PE ratio average, I reiterate the target price of 250p I outlined when I initiated coverage (Alpha Research: 'Tap into a discount cash generator', 27 May 2021). Buy. ?

Simon Thompson's latest book Successful Stock Picking Strategies and his previous book Stock Picking for Profit can be purchased online at www.ypdbooks.com, or by telephoning YPDBooks on 01904 431 213 to place an order. The books are being sold through no other source and are priced at GBP16.95 each plus postage and packaging of GBP3.25 [UK]. Promotion: Subject to stock availability, both books can be purchased for the promotional price of GBP25 with free postage and packaging.

They include case studies of Simon Thompson's market beating Bargain Share Portfolio companies outlining the investment characteristics that made them successful investments.

Simon also highlights many other investment approaches and stock screens he uses to identify small-cap companies with investment potential.

Details of the content can be viewed on www.ypdbooks.com.

Categories
Coupons & Offers

Aldi is officially UK’s cheapest supermarket

Shoppers can save money by shopping at Aldi, which studies show is officially the UK's cheapest supermarket. The cost of a typical basket of shopping was GBP21.61 in Aldi, according to consumer group Which?. But if you live closer to a Lidl, don't worry - it's only 20p more expensive, at GBP21.81.

The cost of the shopping basket in Asda was GBP21.99, Tesco GBP24.21 and Morrisons GBP24.40. The most expensive supermarkets were Sainsbury's (GBP24.41), Ocado (GBP26.82) and - unsurprisingly - Waitrose (GBP28.59). Groceries with some of the biggest price differences included own-label large free-range eggs, which had a difference of GBP1.06 between Aldi and Waitrose.

Another major difference was for own-brand chicken drumsticks, which had a difference of 85p. To find the cheapest supermarket Which? looked at the cost of a basket of 20 items, including groceries and household essentials.

(C) REUTERS Chances are this Aldi shopper is saving loads of money

Last month the top place was taken by Lidl, which charged GBP22.66 to Aldi's GBP23.06. However, for many shoppers it isn't all about price.

Video: New budget supermarket Mere set to 'open 300 UK stores' (Manchester Evening News)

New budget supermarket Mere set to 'open 300 UK stores'What to watch next Click to expand Replay Video UP NEXT

Aldi - like Lidl - is a discounter supermarket, and doesn't have the same range as its bigger rivals.

If you want certainty that all of the items in your 'big shop' will be there in one trip, the bigger supermarkets come out on top. Likewise if you want a named brand item, like Heinz ketchup or Kellogg's cornflakes, Aldi and Lidl are not your best bet. Which? said Asda has been the cheapest of the big supermarkets for more than a year, having claimed the title every month since January 2020.

But a Russian supermarket chain is about to open that will give even Aldi and Lidl a run for their money. Discounter Mere - which claims to be 30% cheaper than any other supermarket - is set to open its first ever UK store in Preston this summer. It had originally planned to open in June, although this was pushed back - and now an exact date is said to depend on when it can complete finishing touches.

As well as opening in Preston, a further three Mere outlets are also planned this year - including two in Wales, in Mold and Caldicot, and another in Castleford in the north of England. In total, the discounter has said it wants to open 300 sites in the UK in the next eight to ten years - but no other locations have been confirmed.

(C) Alamy Stock Photo A branch of Mere, which is soon coming to the UK

Mere, which trades as Svetofor in Russia, has 3,200 stores internationally and opened its first European Mere store in 2018. Mere stores are expected to double up as warehouses, with images from other sites across Europe showing items displayed on pallets.

Suppliers are also expected to deliver straight to the shops, which will each be about 10,000 sq ft.

Aldi managing director of buying Julie Ashfield said: "We are always striving to deliver the highest quality products at the best possible prices for our shoppers, and we are thrilled that our commitment to achieving this goal has been demonstrated yet again, in being named the UK's cheapest supermarket."

Categories
Coupons & Offers

Aldi is officially UK’s cheapest supermarket

Shoppers can save money by shopping at Aldi, which studies show is officially the UK's cheapest supermarket. The cost of a typical basket of shopping was GBP21.61 in Aldi, according to consumer group Which?. But if you live closer to a Lidl, don't worry - it's only 20p more expensive, at GBP21.81.

The cost of the shopping basket in Asda was GBP21.99, Tesco GBP24.21 and Morrisons GBP24.40. The most expensive supermarkets were Sainsbury's (GBP24.41), Ocado (GBP26.82) and - unsurprisingly - Waitrose (GBP28.59). Groceries with some of the biggest price differences included own-label large free-range eggs, which had a difference of GBP1.06 between Aldi and Waitrose.

Another major difference was for own-brand chicken drumsticks, which had a difference of 85p. To find the cheapest supermarket Which? looked at the cost of a basket of 20 items, including groceries and household essentials.

(C) REUTERS Chances are this Aldi shopper is saving loads of money

Last month the top place was taken by Lidl, which charged GBP22.66 to Aldi's GBP23.06. However, for many shoppers it isn't all about price.

Video: New budget supermarket Mere set to 'open 300 UK stores' (Manchester Evening News)

New budget supermarket Mere set to 'open 300 UK stores'What to watch next Click to expand Replay Video UP NEXT

Aldi - like Lidl - is a discounter supermarket, and doesn't have the same range as its bigger rivals.

If you want certainty that all of the items in your 'big shop' will be there in one trip, the bigger supermarkets come out on top. Likewise if you want a named brand item, like Heinz ketchup or Kellogg's cornflakes, Aldi and Lidl are not your best bet. Which? said Asda has been the cheapest of the big supermarkets for more than a year, having claimed the title every month since January 2020.

But a Russian supermarket chain is about to open that will give even Aldi and Lidl a run for their money. Discounter Mere - which claims to be 30% cheaper than any other supermarket - is set to open its first ever UK store in Preston this summer. It had originally planned to open in June, although this was pushed back - and now an exact date is said to depend on when it can complete finishing touches.

As well as opening in Preston, a further three Mere outlets are also planned this year - including two in Wales, in Mold and Caldicot, and another in Castleford in the north of England. In total, the discounter has said it wants to open 300 sites in the UK in the next eight to ten years - but no other locations have been confirmed.

(C) Alamy Stock Photo A branch of Mere, which is soon coming to the UK

Mere, which trades as Svetofor in Russia, has 3,200 stores internationally and opened its first European Mere store in 2018. Mere stores are expected to double up as warehouses, with images from other sites across Europe showing items displayed on pallets.

Suppliers are also expected to deliver straight to the shops, which will each be about 10,000 sq ft.

Aldi managing director of buying Julie Ashfield said: "We are always striving to deliver the highest quality products at the best possible prices for our shoppers, and we are thrilled that our commitment to achieving this goal has been demonstrated yet again, in being named the UK's cheapest supermarket."

Categories
Coupons & Offers

Aldi is officially UK’s cheapest supermarket

Shoppers can save money by shopping at Aldi, which studies show is officially the UK's cheapest supermarket. The cost of a typical basket of shopping was GBP21.61 in Aldi, according to consumer group Which?. But if you live closer to a Lidl, don't worry - it's only 20p more expensive, at GBP21.81.

The cost of the shopping basket in Asda was GBP21.99, Tesco GBP24.21 and Morrisons GBP24.40. The most expensive supermarkets were Sainsbury's (GBP24.41), Ocado (GBP26.82) and - unsurprisingly - Waitrose (GBP28.59). Groceries with some of the biggest price differences included own-label large free-range eggs, which had a difference of GBP1.06 between Aldi and Waitrose.

Another major difference was for own-brand chicken drumsticks, which had a difference of 85p. To find the cheapest supermarket Which? looked at the cost of a basket of 20 items, including groceries and household essentials.

(C) REUTERS Chances are this Aldi shopper is saving loads of money

Last month the top place was taken by Lidl, which charged GBP22.66 to Aldi's GBP23.06. However, for many shoppers it isn't all about price.

Video: New budget supermarket Mere set to 'open 300 UK stores' (Manchester Evening News)

New budget supermarket Mere set to 'open 300 UK stores'What to watch next Click to expand Replay Video UP NEXT

Aldi - like Lidl - is a discounter supermarket, and doesn't have the same range as its bigger rivals.

If you want certainty that all of the items in your 'big shop' will be there in one trip, the bigger supermarkets come out on top. Likewise if you want a named brand item, like Heinz ketchup or Kellogg's cornflakes, Aldi and Lidl are not your best bet. Which? said Asda has been the cheapest of the big supermarkets for more than a year, having claimed the title every month since January 2020.

But a Russian supermarket chain is about to open that will give even Aldi and Lidl a run for their money. Discounter Mere - which claims to be 30% cheaper than any other supermarket - is set to open its first ever UK store in Preston this summer. It had originally planned to open in June, although this was pushed back - and now an exact date is said to depend on when it can complete finishing touches.

As well as opening in Preston, a further three Mere outlets are also planned this year - including two in Wales, in Mold and Caldicot, and another in Castleford in the north of England. In total, the discounter has said it wants to open 300 sites in the UK in the next eight to ten years - but no other locations have been confirmed.

(C) Alamy Stock Photo A branch of Mere, which is soon coming to the UK

Mere, which trades as Svetofor in Russia, has 3,200 stores internationally and opened its first European Mere store in 2018. Mere stores are expected to double up as warehouses, with images from other sites across Europe showing items displayed on pallets.

Suppliers are also expected to deliver straight to the shops, which will each be about 10,000 sq ft.

Aldi managing director of buying Julie Ashfield said: "We are always striving to deliver the highest quality products at the best possible prices for our shoppers, and we are thrilled that our commitment to achieving this goal has been demonstrated yet again, in being named the UK's cheapest supermarket."

Categories
Coupons & Offers

Aldi is officially UK’s cheapest supermarket

Shoppers can save money by shopping at Aldi, which studies show is officially the UK's cheapest supermarket. The cost of a typical basket of shopping was GBP21.61 in Aldi, according to consumer group Which?. But if you live closer to a Lidl, don't worry - it's only 20p more expensive, at GBP21.81.

The cost of the shopping basket in Asda was GBP21.99, Tesco GBP24.21 and Morrisons GBP24.40. The most expensive supermarkets were Sainsbury's (GBP24.41), Ocado (GBP26.82) and - unsurprisingly - Waitrose (GBP28.59). Groceries with some of the biggest price differences included own-label large free-range eggs, which had a difference of GBP1.06 between Aldi and Waitrose.

Another major difference was for own-brand chicken drumsticks, which had a difference of 85p. To find the cheapest supermarket Which? looked at the cost of a basket of 20 items, including groceries and household essentials.

(C) REUTERS Chances are this Aldi shopper is saving loads of money

Last month the top place was taken by Lidl, which charged GBP22.66 to Aldi's GBP23.06. However, for many shoppers it isn't all about price.

Video: New budget supermarket Mere set to 'open 300 UK stores' (Manchester Evening News)

New budget supermarket Mere set to 'open 300 UK stores'What to watch next Click to expand Replay Video UP NEXT

Aldi - like Lidl - is a discounter supermarket, and doesn't have the same range as its bigger rivals.

If you want certainty that all of the items in your 'big shop' will be there in one trip, the bigger supermarkets come out on top. Likewise if you want a named brand item, like Heinz ketchup or Kellogg's cornflakes, Aldi and Lidl are not your best bet. Which? said Asda has been the cheapest of the big supermarkets for more than a year, having claimed the title every month since January 2020.

But a Russian supermarket chain is about to open that will give even Aldi and Lidl a run for their money. Discounter Mere - which claims to be 30% cheaper than any other supermarket - is set to open its first ever UK store in Preston this summer. It had originally planned to open in June, although this was pushed back - and now an exact date is said to depend on when it can complete finishing touches.

As well as opening in Preston, a further three Mere outlets are also planned this year - including two in Wales, in Mold and Caldicot, and another in Castleford in the north of England. In total, the discounter has said it wants to open 300 sites in the UK in the next eight to ten years - but no other locations have been confirmed.

(C) Alamy Stock Photo A branch of Mere, which is soon coming to the UK

Mere, which trades as Svetofor in Russia, has 3,200 stores internationally and opened its first European Mere store in 2018. Mere stores are expected to double up as warehouses, with images from other sites across Europe showing items displayed on pallets.

Suppliers are also expected to deliver straight to the shops, which will each be about 10,000 sq ft.

Aldi managing director of buying Julie Ashfield said: "We are always striving to deliver the highest quality products at the best possible prices for our shoppers, and we are thrilled that our commitment to achieving this goal has been demonstrated yet again, in being named the UK's cheapest supermarket."

Categories
Coupons & Offers

Aldi is officially UK’s cheapest supermarket

Shoppers can save money by shopping at Aldi, which studies show is officially the UK's cheapest supermarket. The cost of a typical basket of shopping was GBP21.61 in Aldi, according to consumer group Which?. But if you live closer to a Lidl, don't worry - it's only 20p more expensive, at GBP21.81.

The cost of the shopping basket in Asda was GBP21.99, Tesco GBP24.21 and Morrisons GBP24.40. The most expensive supermarkets were Sainsbury's (GBP24.41), Ocado (GBP26.82) and - unsurprisingly - Waitrose (GBP28.59). Groceries with some of the biggest price differences included own-label large free-range eggs, which had a difference of GBP1.06 between Aldi and Waitrose.

Another major difference was for own-brand chicken drumsticks, which had a difference of 85p. To find the cheapest supermarket Which? looked at the cost of a basket of 20 items, including groceries and household essentials.

(C) REUTERS Chances are this Aldi shopper is saving loads of money

Last month the top place was taken by Lidl, which charged GBP22.66 to Aldi's GBP23.06. However, for many shoppers it isn't all about price.

Video: New budget supermarket Mere set to 'open 300 UK stores' (Manchester Evening News)

New budget supermarket Mere set to 'open 300 UK stores'What to watch next Click to expand Replay Video UP NEXT

Aldi - like Lidl - is a discounter supermarket, and doesn't have the same range as its bigger rivals.

If you want certainty that all of the items in your 'big shop' will be there in one trip, the bigger supermarkets come out on top. Likewise if you want a named brand item, like Heinz ketchup or Kellogg's cornflakes, Aldi and Lidl are not your best bet. Which? said Asda has been the cheapest of the big supermarkets for more than a year, having claimed the title every month since January 2020.

But a Russian supermarket chain is about to open that will give even Aldi and Lidl a run for their money. Discounter Mere - which claims to be 30% cheaper than any other supermarket - is set to open its first ever UK store in Preston this summer. It had originally planned to open in June, although this was pushed back - and now an exact date is said to depend on when it can complete finishing touches.

As well as opening in Preston, a further three Mere outlets are also planned this year - including two in Wales, in Mold and Caldicot, and another in Castleford in the north of England. In total, the discounter has said it wants to open 300 sites in the UK in the next eight to ten years - but no other locations have been confirmed.

(C) Alamy Stock Photo A branch of Mere, which is soon coming to the UK

Mere, which trades as Svetofor in Russia, has 3,200 stores internationally and opened its first European Mere store in 2018. Mere stores are expected to double up as warehouses, with images from other sites across Europe showing items displayed on pallets.

Suppliers are also expected to deliver straight to the shops, which will each be about 10,000 sq ft.

Aldi managing director of buying Julie Ashfield said: "We are always striving to deliver the highest quality products at the best possible prices for our shoppers, and we are thrilled that our commitment to achieving this goal has been demonstrated yet again, in being named the UK's cheapest supermarket."

Categories
Coupons & Offers

Aldi is officially UK’s cheapest supermarket

Shoppers can save money by shopping at Aldi, which studies show is officially the UK's cheapest supermarket. The cost of a typical basket of shopping was GBP21.61 in Aldi, according to consumer group Which?. But if you live closer to a Lidl, don't worry - it's only 20p more expensive, at GBP21.81.

The cost of the shopping basket in Asda was GBP21.99, Tesco GBP24.21 and Morrisons GBP24.40. The most expensive supermarkets were Sainsbury's (GBP24.41), Ocado (GBP26.82) and - unsurprisingly - Waitrose (GBP28.59). Groceries with some of the biggest price differences included own-label large free-range eggs, which had a difference of GBP1.06 between Aldi and Waitrose.

Another major difference was for own-brand chicken drumsticks, which had a difference of 85p. To find the cheapest supermarket Which? looked at the cost of a basket of 20 items, including groceries and household essentials.

(C) REUTERS Chances are this Aldi shopper is saving loads of money

Last month the top place was taken by Lidl, which charged GBP22.66 to Aldi's GBP23.06. However, for many shoppers it isn't all about price.

Video: New budget supermarket Mere set to 'open 300 UK stores' (Manchester Evening News)

New budget supermarket Mere set to 'open 300 UK stores'What to watch next Click to expand Replay Video UP NEXT

Aldi - like Lidl - is a discounter supermarket, and doesn't have the same range as its bigger rivals.

If you want certainty that all of the items in your 'big shop' will be there in one trip, the bigger supermarkets come out on top. Likewise if you want a named brand item, like Heinz ketchup or Kellogg's cornflakes, Aldi and Lidl are not your best bet. Which? said Asda has been the cheapest of the big supermarkets for more than a year, having claimed the title every month since January 2020.

But a Russian supermarket chain is about to open that will give even Aldi and Lidl a run for their money. Discounter Mere - which claims to be 30% cheaper than any other supermarket - is set to open its first ever UK store in Preston this summer. It had originally planned to open in June, although this was pushed back - and now an exact date is said to depend on when it can complete finishing touches.

As well as opening in Preston, a further three Mere outlets are also planned this year - including two in Wales, in Mold and Caldicot, and another in Castleford in the north of England. In total, the discounter has said it wants to open 300 sites in the UK in the next eight to ten years - but no other locations have been confirmed.

(C) Alamy Stock Photo A branch of Mere, which is soon coming to the UK

Mere, which trades as Svetofor in Russia, has 3,200 stores internationally and opened its first European Mere store in 2018. Mere stores are expected to double up as warehouses, with images from other sites across Europe showing items displayed on pallets.

Suppliers are also expected to deliver straight to the shops, which will each be about 10,000 sq ft.

Aldi managing director of buying Julie Ashfield said: "We are always striving to deliver the highest quality products at the best possible prices for our shoppers, and we are thrilled that our commitment to achieving this goal has been demonstrated yet again, in being named the UK's cheapest supermarket."

Categories
Coupons & Offers

Aldi is officially UK’s cheapest supermarket

Shoppers can save money by shopping at Aldi, which studies show is officially the UK's cheapest supermarket. The cost of a typical basket of shopping was GBP21.61 in Aldi, according to consumer group Which?. But if you live closer to a Lidl, don't worry - it's only 20p more expensive, at GBP21.81.

The cost of the shopping basket in Asda was GBP21.99, Tesco GBP24.21 and Morrisons GBP24.40. The most expensive supermarkets were Sainsbury's (GBP24.41), Ocado (GBP26.82) and - unsurprisingly - Waitrose (GBP28.59). Groceries with some of the biggest price differences included own-label large free-range eggs, which had a difference of GBP1.06 between Aldi and Waitrose.

Another major difference was for own-brand chicken drumsticks, which had a difference of 85p. To find the cheapest supermarket Which? looked at the cost of a basket of 20 items, including groceries and household essentials.

(C) REUTERS Chances are this Aldi shopper is saving loads of money

Last month the top place was taken by Lidl, which charged GBP22.66 to Aldi's GBP23.06. However, for many shoppers it isn't all about price.

Aldi - like Lidl - is a discounter supermarket, and doesn't have the same range as its bigger rivals. If you want certainty that all of the items in your 'big shop' will be there in one trip, the bigger supermarkets come out on top. Likewise if you want a named brand item, like Heinz ketchup or Kellogg's cornflakes, Aldi and Lidl are not your best bet.

Which? said Asda has been the cheapest of the big supermarkets for more than a year, having claimed the title every month since January 2020. But a Russian supermarket chain is about to open that will give even Aldi and Lidl a run for their money. Discounter Mere - which claims to be 30% cheaper than any other supermarket - is set to open its first ever UK store in Preston this summer.

It had originally planned to open in June, although this was pushed back - and now an exact date is said to depend on when it can complete finishing touches. As well as opening in Preston, a further three Mere outlets are also planned this year - including two in Wales, in Mold and Caldicot, and another in Castleford in the north of England. In total, the discounter has said it wants to open 300 sites in the UK in the next eight to ten years - but no other locations have been confirmed.

(C) Alamy Stock Photo A branch of Mere, which is soon coming to the UK

Mere, which trades as Svetofor in Russia, has 3,200 stores internationally and opened its first European Mere store in 2018.

Mere stores are expected to double up as warehouses, with images from other sites across Europe showing items displayed on pallets.

Suppliers are also expected to deliver straight to the shops, which will each be about 10,000 sq ft.

Aldi managing director of buying Julie Ashfield said: "We are always striving to deliver the highest quality products at the best possible prices for our shoppers, and we are thrilled that our commitment to achieving this goal has been demonstrated yet again, in being named the UK's cheapest supermarket."

Categories
Coupons & Offers

The inevitable rise of discount chains in the UK

Discount retail


The UK's discount market is set to grow by 36.1 per cent by next year, reaching GBP32.5 billion, according to GlobalData. The arrival of German discounters Aldi and Lidl in the UK has caused nothing short of chaos for Britain's largest supermarkets. The Big 4 grocers - Tesco, Asda, Sainsbury's and Morrisons - have been facing a game-changing threat as Aldi and Lidl cut into their market share with no-frills shopping that is marking a generational shift in retail patterns.

In recent years, other discount retailers outside the grocery sector, such as B&M and Poundland, have also presented a threat to established UK chains by expanding their presence. So much so that last year, GlobalData predicted that discounters' market share would grow 25 per cent by 2024. Once-loyal customers have deserted the big supermarkets after loyalty schemes, multi-buy promotions and money-off vouchers fell prey to the lure of the permanently low prices offered by discounters.

Discount retail growth has been driven by an increasingly price-sensitive shopper, aggressive space growth from the discounters, improved shopping experience, and growth in product range. Evidently, the UK's retail sector presents an attractive market for discounters, as already it boasts discount chains such as Aldi, Lidl, B&M, Savers, and Poundland. However, the sector is in line for a major shake-up, after Russian discount chain Mere recently announced plans to open over 300 stores in the UK within the next eight to 10 years.

"The expansion of discount retailers has been accelerated by the Covid-19 pandemic"

Mere plans to undercut Lidl and Aldi by 20 per cent to 30 per cent.

It also wants to scale its UK presence once processes have been established. The first four UK stores for Mere will open this year in Preston, Castleford, Caldicot and Mold. Meanwhile, Poundland attempted to capitalise on its growth during lockdown by opening two convenience stores - Poundland Local - earlier this year for the first time.

A Poundland spokesperson told Retail Gazette that the discount retailer saw "potential for a smaller format to support our growth and transformation programme". Melissa Minkow, retail industry lead at IT company CI&T, argued that the expansion of discount retailers has been accelerated by the Covid-19 pandemic. "The combination of consumers feeling extra price-sensitive plus the emptying of so many large store lots paved the way for discount retailers to thrive," she said.

"Often times, the more informed consumers become, the more they come to realise and discover that lower-priced brands offer affordable, quality alternatives to items they had been buying at a premium. "There is less of a stigma surrounding discount brands and shopping. "Additionally, the pandemic caused a shift in prioritisation among households away from apparel, accessories, experiential purchases, and towards household goods and non-perishable grocery products - the categories where discount chains possess strengths."

The Resilient Retail Club founder Catherine Erdly said discount retailers were becoming more popular as people became more aware that they can get a great variety of products. "Discount retailers have really made the move away from poor design, poor quality and into showing themselves as real competitors in the retail market but at really great prices," she said.

Discount retailMere plans to undercut Lidl and Aldi by 20% to 30%

Retail expert Andy Barr agreed. He said the pandemic has opened up discount retailers to an entirely new, and previously untapped, demographic.

"As belts were tightened, the stigma associated with visiting these kinds of stores fell away completely and we ourselves saw a massive spike in bargain hunters hitting our site and tracking a product to get the best deal possible," he told Retail Gazette. "Variety discount stores have - until now - been the poor relative of the food discounters, but the mainstream appeal of the likes of B&M has risen the credibility of the entire Variety sector." As Mere works on plans to open more UK stores, it inevitably presents a threat to fellow discounters that have long established their growth in the UK. Barr argued that UK consumers would not care about the origins of Mere, but instead will care about getting discounts on big brand products.

"Mere will be a welcome addition to the dying UK high street and there is clearly room for another discount brand given the wider financial effects of the pandemic," he said. Retail expert Nelson Blackley expects Mere to face some challenges from incumbent UK discounters - not least Aldi and Lidl. "Mere appear to be looking for sites similar to those occupied by Aldi and Lidl - outside London and the South East and close to major routes," he said.

"That suggest retail parks may be the battleground. "Mere claim their super low cost model - apparently with prices 20-30 per cent below supermarkets is based on 'no service and no marketing'. "However, I am unsure how establishing new stores across the UK and awareness can be achieved without marketing.

"Both Aldi and Lidl have invested large sums in marketing and branding since they arrived in the UK, including leaflets TV advertising and sponsorship. "It will be important for Mere to understand this sentiment in the UK market and so look to establish a unique selling point beyond merely low prices. "Their other challenge will be how Mere support local UK producers, given that European-made goods account for up to 90 per cent of Mere's range, and so they clearly have a strong investment in continental-based businesses.

"However, in a post Brexit landscape, all the bureaucracy and extra costs associated with imports from Europe will be a real challenge for Mere in keeping prices low." Minkow said Mere should tap into the UK's fondness for a bargain if the chain wasn't planning to already. "The fact that they'll be coming in under their competitions' prices by 20-30 per cent is extremely appealing to the UK shopper's bargain-loving tendencies," she said.

"This is an especially smart moment to do so when the economy and more disciplined spending have been so important in consumers' minds. "Any grocer should feel at least a bit threatened by the launch of Mere, as they will undoubtedly capture some of shoppers' food spend. "When discount retailers pop up on the scene, consumers' excitement around potential savings and curiosity regarding the brand are crucial to driving trials."

Click here to sign up to Retail Gazette's free daily email newsletter