Signal Aldi and Lidl force UK incumbents to rework pricing, quality, assortment, and cost base

Summary

McKinsey observes that resale is only one of the pressures bearing down on established consumer brands, as value-focused players keep raising expectations at every price point. Its example comes from the United Kingdom grocery market. There, fast-growing discount chains Aldi and Lidl have pushed incumbent retailers to reconsider their prices, product quality, product range and cost base. The report says similar dynamics are unfolding in many other categories, from fashion to consumer electronics. The lesson it draws is that established players cannot rely on their position when discounters improve quality while holding prices down. Instead, they must keep finding ways to offer more for less.