A recession is here and belts are being tightened! There is no way of ignoring that fact, but that does not mean it is all doom and gloom for everyone. Yes the retail sector is taking a hit as consumers are just not willing to pay for items that are not considered necessities. Yet there are certain companies within retail that could buck the trend and build during this downturn.

Over the past six months supermarkets have changed their tact on what they are putting in front of consumers. Asda and Tesco are going head to head with the cheapest basket value, each week they come out with a new comparison showing they are more affordable than the other. So far it looks like Asda has been winning that particular fight, according to the Grocer, Asda is thought to have achieved 7% growth over the Christmas period compared to Tesco who only managed to achieve a 2.5% growth over the same period.

Sainsbury’s posted a 4.5% increase over the same period and are saying it was their best Christmas yet, this could be as a result of consumers looking for high-quality, more reasonable options to Waitrose and M&S.

However hidden away behind all of this is the interesting story of . The three ‘low cost’ supermarkets are going from strength to strength. According to King Sturge property consultants the three are looking for 150 new sites for stores between them. This is really impressive considering they have approximately 1050 stores between them. This equates to a potential growth of around 14%.

So they all have a safe position in the market and are all growing during the downturn, but is there more they could be doing. Aldi has been the first to kick off with their new offline push featuring TV chef Phil Vickery. They have developed a number of good value recipes that use ingredients from across their range and are very reminiscent of the Jamie Oliver adverts for Sainsbury’s. The campaign is a great way of bringing a new face to what people perceive as just a value supermarket. They haven’t stopped there, they have recently brought their Travel brand to the UK, it maybe new here, but they regularly take care of more that half a million holiday makers across Europe.

Well Aldi has made a number of shifts in order to develop their brand across the UK, but what about Lidl and Netto? According to IGD Analysis, Netto launched their first ever TV campaign in the UK just before Christmas with the strapline “The big difference is the price”. Lidl have slightly more experience with TV advertising having started back in 2006.

Even though they have kicked off with TV, could they have benefited from other channels, Lidl have dabbled in online and Netto doesn’t seem to have started yet. Are they missing a trick by not upping their presence in this area. They are both situated perfectly to really develop over 2009 and use new channels to drive footfall.

Lets take digital as an example. Here are four very simple suggestions that can be easily developed online.

1. Don’t waste huge amounts of money going head to head with Asda, Tesco or Sainsbury. I would advise them against buying large home page take overs on MSN or Yahoo at this stage. Yes they can get in front of a lot of people, but they should have a proven conversion model in place before embarking on this route.
2. Develop their conversion model. Are they going to be able to convert online or are they going to have to drive footfall to their offline locations. If there is no need to drive online sales, they do not need to drive consumers to their own sites. They could take some of their site functionality out to consumers and put it in their advertising
3. Work on who their target audiences are and where they can grow these. Sainsbury has benefited from consumer shifts to their brand from more expensive competitors. Lidl and Netto could start working on a similar consumer shift.
4. What about helping more consumers find their stores, something as simple as store location search functionality on all advertising can help this.

It will be interesting to see what their next move is.

About Alain Portmann

My job is simple. To inspire staff, clients and consumers.

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