New discounter set to further disrupt grocery retail

As the grocery retailers’ price war ramps up, the last thing the big five grocers, and the two established discounters need is yet further disruption to the already Brexit and COVID-19 disrupted market, but that’s exactly what Mere - a Russian hard discounter - is setting out to do.

Mere has claimed it will undercut Lidl and Aldi prices by 20%-30% with its ‘no service, no marketing’ policy for its warehouse-style stores - which it’s planning on opening 300 of in the UK over the next ten years.

No frills

The warehouse-style store description doesn’t just cover the shopping experience either, as Mere will have no warehousing or logistics to chip away at margins, instead suppliers will deliver direct to store and pallets will be wheeled in, and dropped right onto the shop floor.

Stores will typically be around 10,000 sqft and will stock a maximum of 1,200 products across ambient, chilled and frozen, with just eight members of staff, including cashiers and delivery handlers, to keep overheads low.

Plugging a gap

The discounter is said to compare itself to Costco, but with no membership fee and no in-store service, which UK head of buying Pavels Antonovs backs up, saying: “We are the gap in the market. We don’t have any competitors. Our model is no service and no marketing. Some will understand us, some won’t.”

Mere is part of the Svetofor group of companies, one of the largest Russian retail operators in the hard discounter segment with over 1000 stores in Russia, a growing number in eastern Europe and plans to enter Italy, Spain, Greece, Bulgaria and the US as well as the UK.

First stores

The first of its UK stores is expected to open next month in Ribbleton, Preston (Project ID: 21210658) with three further stores opening soon afterwards in Mold, North Wales (Project ID: 21210657), Caldicot, Gwent (Project ID: 21210660), and Castleford, West Yorkshire (Project ID: 21210659).

Further sites are currently believed to be being considered for Southern Scotland, Devon, Cardiff, Banbury, Selby, Bradford, Grantham, Sheffield, Southampton, Stockport, Kettering, and Neath.

Closing the gap

Meanwhile, other discounters are taking advantage of the gap that Mere have identified in the market, perhaps disproving their claim to having no competitors in this space.

One Below, the discounter-chain launched in 2019 by Poundworld founder Chris Edwards, is ramping up its estate expansion with 90 stores due to open by the end of this year. Building on an already impressive estate building of 75 stores since just 2019, One Below have plans for a further 15 this year and another 10 next.

Eying up the convenience gap

The deep discount sector isn’t just focused on the high street, as MaxiSaver are showing, with a growing estate of high street discount offerings. The company started out last August and have eight stores in the Midlands which they intend to extend to 20 by the end of this year.

Not being one to be left behind, Poundland is also entering the deep discount convenience space with two new format stores opening last month in Barnsley, and one in Hornsea, Yorkshire.

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