Within the discount market, clothing has been identified as the most “under-penetrated sector” according to GlobalData, with only 0.6 percent share of the 334 million pounds total UK clothing market.

However, GlobalData is stating that the improvement in perception of the discounters, such as Lidl, which just launched Esmara by Heidi Klum, will see the market value rise to 643 million pounds in 2022.

The report reveals that clothing at the discounters, identified as retailers which operate at a low price point, with high promotional activity and a number of offers at any one time, will undercut the value clothing providers such as Primark on many items, and will lead customers to switch away from the value retailers, particularly among the discounters’ current shopper base. With over 60 percent of UK consumers shopping at a discounter in 2017, the potential customer base for discount clothing is substantial.

“Clothing is more compatible with the discount model than it appears at first glance, particularly in the way that Lidl has approached its Esmara range” explains Molly Johnson-Jones, senior retail analyst at GlobalData. “The celebrity collaboration creates anticipation and a feeling of exclusivity away from the discount reputation of a store, and Lidl’s choice to focus on bold prints and colours was risky but it shifts the perception of the range more towards fast fashion than discount basics.”

Johnson-Jones added: “The products are designed to maintain margins at low prices and fit in with the existing supply chain and clothing adds another area for the discounters to grow sales and disrupt the mainstream market. Esmara might not be a threat to the clothing market now, but it will change consumer perception of discount clothing and taps into a niche which has been neglected so far.”


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