The Local Data Company monitors the presence of supermarkets, convenience stores and discounters in towns and regions around the UK.
This year supermarket openings have slowed to 2.2%, down from a peak of 15.3% in 2012, while discounters’ net change this year is 5.6% and convenience stores’ is 4%.
The compound annual growth rate for discounters was 8.2%, ahead of convenience stores’ 7.6% and supermarkets’ 6% over the past five years.
LDC director Matthew Hopkinson said the figures were like “a car crash in slow motion”.
He said: “This research clearly shows why the supermarket operators are struggling. This comes not only as a result of deflation and subdued consumer spend but also a massive increase in competition both from outside and within. This is illustrated by the fact that the big four supermarkets opened more than 500 new stores since 2011 and while doing this also opened nearly 2,000 convenience stores.
“This growth has significantly increased operating costs in property alone before considering logistical implications and the cost of developing and delivering online grocery sales. At the same time as this the discounters have increased their store numbers by nearly 1,400 and have a serious alternative to the big four supermarkets both on price and offer.”
Clive Black, head of research at Shore Capital Markets, said supermarkets are making changes that he predicts will stabilise them for the future.
But he said: “No one forecast the collapse of demand in 2009, which led the industry into unheard of territory of multi-year volume contraction against a rising British population. However, it is also clear that well into that demand gap the same majors kept opening too much space and kept ignoring the reality of the discount channel.
“Matthew Hopkinson writes of a car crash for superstore operators. We’d call it a high impact motorway smash when measured in terms of earnings, with the superstore vehicles now in the garage, assessments undertaken and repair underway.”
Over the whole five years, the number of total shops grew 43.3%, from 8,956 in 2011 to 12,831 in 2015.
LDC analysed the growth rates of Tesco, including One Stop, Sainsbury’s, Morrisons, Asda and the Co-operative Food against Aldi, Lidl, Iceland, 99p Stores, Poundland, Poundstretcher, Poundworld, Home Bargains, B&M Bargains and Farmfoods from 2011 to 2015 for the report.
It did not include M&S Simply Food, Waitrose or Little Waitrose.
Within convenience, supermarkets opened more shops than other c-store operators, with Tesco moving fastest with 1,104 new shops in five years.
Supermarkets have been drastically cutting their wine ranges in response to the success of the discounters’ drinks model, and 98% of wine suppliers polled in OLN’s Wine Report believe the discounters will continue on their inexorable growth course.