UK set for surge in discount grocers

The economic downturn provides an opportunity for discount grocers to extend their influence in European retailing and in particular make headway in the UK and France, according to a report.

Verdict Research said discounters like privately-owned German groups Aldi and Lidl should raise as much finance as possible to aggressively expand in markets where they are under-represented.

"Now is the time for the likes of Aldi and Lidl to pounce in the UK," said analyst Daniel Lucht and co-author of the report.

Discounters currently account for an average of 16 per cent of total grocery sales across the EU, the report said, adding there were huge variations, with Germany on 43.8 per cent and the UK on just 3.7 per cent.

It said France, on 14.6 per cent, was another opportunity for strong growth as the Loi Raffarin, which has tightly regulated retail space, is relaxed next month.