Comment: The grocery battle heats up as Lidl and Aldi target more affluent customers

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Discount supermarket chain Lidl has launched its first television advertising campaign in the UK in its latest attempt to grab middle class shoppers from the likes of Tesco and Sainsbury’s.

Discount supermarket chain Lidl has launched its first television advertising campaign in the UK in its latest attempt to grab middle class shoppers from the likes of Tesco and Sainsbury’s - and the results should be interesting.

After all, its previous efforts seem to be working. Both Lidl and Aldi are now officially amongst the fastest growing food retailers in the UK.

What is perhaps even more interesting, however, is the make-up of the people who are doing the buying. Retail research company Verdict has calculated that the proportion of Aldi’s regular customers within the AB socioeconomic group, who are generally considered to be ‘middle class’, jumped from 12.9 per cent to 18.6 per cent last year.

Aldi’s ‘Like brands. Only cheaper’ strapline makes its aspirations in this area pretty clear. The company is quick to highlight the fact that all consumers can now buy the same quality goods, without having to pay over the odds.

In order to drive this message home, Aldi’s Christmas 2012 campaign actually ignored its direct competitors completely and chose to make comparisons between its products and those of more upmarket retailers instead.

With such impressive business savvy, perhaps it isn’t surprising that Aldi was named Zolfo Cooper’s Growth Retailer of the Year for 2013. The company has got its proposition absolutely spot on for consumers in this current market and is set to be a clear winner this Christmas. In a recent consumer taste test, an Aldi Christmas pudding has already trumped a ‘posh pud’ costing six times more from Fortnum & Mason.

The truth is that both Aldi and Lidl have a very clear understanding of what their customers want, and have revised their selection - and the quality of their products - accordingly. Both brands, for example, have introduced fresh meat, baked goods, organic fruit, fresh noodles and specialty soups into their stores.

In other words, just as Primark has managed to win over the middle classes for fashion, Aldi and Lidl have done the same with food. And the proof is in the (good quality) pudding: as a direct result of such strategies, both of these brands are becoming more appealing to more affluent customers.

So what’s the secret? Both brands have managed to walk a very fine line by focusing on the value that consumers want, but without cheapening the brand. And that isn’t easy. A key part of this strategy has been the ability to intermingle discount brands with more upmarket products, such as lobster, caviar and Serrano ham. As a result, any reticence that consumers had about buying from a ‘discount’ grocer has now more or less disappeared.

For all these reasons, the big four grocers had better look over their shoulders, particularly in light of Aldi’s move into the smaller store format. Of course, none of this is a secret: the need to compete with these new rivals is sure to be dominating supermarket strategy meetings all across the land. And if it’s not, it certainly should be.