Aldi and Lidl make rapid expansion in Britain's grocery market

LONDON, Mar 25 (Reuters): German-owned discount supermarkets Aldi and Lidl are ploughing ahead with a rapid expansion in Britain and are on course to grab more market share from the traditional big four players.

A top Aldi executive said it aimed to have 1,000 UK stores by 2022, up from its current 762 while Lidl said it sees potentially 1,200 to 1,500 stores in the long term, up from 710.

Meanwhile, store openings at market leader Tesco, Sainsbury's, Asda and Morrisons have slowed to a trickle. They are shedding thousands of jobs so they can save money and better compete with the discounters.

Aldi and Lidl's cut-price model have turned them into two of the world's biggest retailers. They have expanded abroad as growth stagnated at home.

Aldi launched in Britain in 1994 and Lidl in 1990 and they have changed the shape of the UK grocery market. But their profits have fallen and traditional retailers have questioned whether the model is sustainable.

The discounters also have little presence online and could face competition there from the big four and grocery newcomers such as Amazon.

For now, Aldi and Lidl's combined share of the 200 billion pound ($283 billion) UK grocery market is set to grow. It will be 15 per cent by 2020, up from 12.1 per cent currently, according to Ashley Anzie, strategic insight director for grocery at researcher Kantar Worldpanel.