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The supermarket (house) price war

Is Aldi the new Waitrose' Recent research has highlighted the ‘Waitrose effect’ on house prices, with a 50% premium for a home within walking distance of the retailer. Until now, discount supermarkets such as Aldi have been located in less affluent locations. However, a combination of the credit crunch and changing social attitudes in ‘Austerity Britain’ have introduced the middle classes to the joys of bargain hunting and discounted groceries. High quality at low prices is the new mantra and now, the value supermarkets have plans to open for business in some of the country’s pricier postcodes. New statistics from Kantar Worldpanel on the performance of the larger supermarket chains shows that Tesco, Sainsbury’s and Morrison’s have all lost market share in the past 12 months to three rising stars: Waitrose, Aldi and Lidl. Waitrose and Aldi now have a combined share of almost 10% of the grocery market (5.1% and 4.8% respectively), compared with 4.9% and 3.7% a year ago and are jostling for the position of the sixth largest UK supermarket. We commissioned some trend analysis to compare average house prices close to an existing Aldi or Waitrose store with those on Aldi’s target list and found that, in the future, the Aldi-effect on house prices could be every bit as potent as the Waitrose one. Just over a third (38%) of all postcode districts in England have average house prices of over £250,000. But in postcode districts with a Waitrose, prices averaged almost £400,000 (£394,619). Aldi, on the other hand, has in the past chosen to locate in far more modest locations with average prices of just £180,792. This is less than half the average for an area with a Waitrose store. However, this could all be about to change. Aldi is planning to spend in excess of £84 million over the next 12 months building 33 new stores and aims to have a network of 1,000 stores by 2020. Over half of all Brits already shop in either Aldi or Lidl at some point and it will soon be much easier for the middle classes to find one near home, wherever they live. In future, the presence of an Aldi will send out some very positive ‘buy’ signals to prospective homeowners. This is because a comparison between Aldi’s current and target locations shows a substantial shift ‘upmarket’. Here’s the proof. The average house price in an Aldi target location is £238,909 (compared with £180,000 for existing stores). What’s more, 47% of their target locations have average house prices of over £250,000, a huge shift from the current 10%. The Waitrose-effect research published last year found that homes in a postcode with a Waitrose store attracted a price premium of as much as 50% in some London locations and a 25% premium was not unusual in other towns. Prospective Aldi locations include many of London’s more sought after postcodes, as well as affluent towns in the Home Counties like Esher in Surrey, where average values exceed £879,000. Outside of the South East, Aldi is also targeting affluent areas such as Alderley Edge and Wilmslow in Cheshire (averaging £466,560 and £324,576 respectively). Indeed, Aldi is already beginning its colonisation of Waitrose territory, having opened a store last summer in nearby Knutsford, where prices average £382,000 and more recently in Cirencester, where prices average over £330,000. Given this seismic shift in marketing strategy, it seems that the opening of a new Aldi, from now on, will signal a location with an affluent resident population, and some very smart and savvy shoppers.     If you would like more information on how amenities in your area could affect the price of your property, speak to your nearest office today. Click here to find yours.

Winkworth Blog Nov_v1[2]

Is Aldi the new Waitrose' Recent research has highlighted the ‘Waitrose effect’ on house prices, with a 50% premium for a home within walking distance of the retailer. Until now, discount supermarkets such as Aldi have been located in less affluent locations. However, a combination of the credit crunch and changing social attitudes in ‘Austerity Britain’ have introduced the middle classes to the joys of bargain hunting and discounted groceries. High quality at low prices is the new mantra and now, the value supermarkets have plans to open for business in some of the country’s pricier postcodes.

New statistics from Kantar Worldpanel on the performance of the larger supermarket chains shows that Tesco, Sainsbury’s and Morrison’s have all lost market share in the past 12 months to three rising stars: Waitrose, Aldi and Lidl. Waitrose and Aldi now have a combined share of almost 10% of the grocery market (5.1% and 4.8% respectively), compared with 4.9% and 3.7% a year ago and are jostling for the position of the sixth largest UK supermarket.

We commissioned some trend analysis to compare average house prices close to an existing Aldi or Waitrose store with those on Aldi’s target list and found that, in the future, the Aldi-effect on house prices could be every bit as potent as the Waitrose one.

Just over a third (38%) of all postcode districts in England have average house prices of over £250,000. But in postcode districts with a Waitrose, prices averaged almost £400,000 (£394,619). Aldi, on the other hand, has in the past chosen to locate in far more modest locations with average prices of just £180,792. This is less than half the average for an area with a Waitrose store. aldi_chart_1 However, this could all be about to change. Aldi is planning to spend in excess of £84 million over the next 12 months building 33 new stores and aims to have a network of 1,000 stores by 2020. Over half of all Brits already shop in either Aldi or Lidl at some point and it will soon be much easier for the middle classes to find one near home, wherever they live.

In future, the presence of an Aldi will send out some very positive ‘buy’ signals to prospective homeowners. This is because a comparison between Aldi’s current and target locations shows a substantial shift ‘upmarket’.

Here’s the proof. The average house price in an Aldi target location is £238,909 (compared with £180,000 for existing stores). What’s more, 47% of their target locations have average house prices of over £250,000, a huge shift from the current 10%.

The Waitrose-effect research published last year found that homes in a postcode with a Waitrose store attracted a price premium of as much as 50% in some London locations and a 25% premium was not unusual in other towns.

Prospective Aldi locations include many of London’s more sought after postcodes, as well as affluent towns in the Home Counties like Esher in Surrey, where average values exceed £879,000. Outside of the South East, Aldi is also targeting affluent areas such as Alderley Edge and Wilmslow in Cheshire (averaging £466,560 and £324,576 respectively). Indeed, Aldi is already beginning its colonisation of Waitrose territory, having opened a store last summer in nearby Knutsford, where prices average £382,000 and more recently in Cirencester, where prices average over £330,000.

Given this seismic shift in marketing strategy, it seems that the opening of a new Aldi, from now on, will signal a location with an affluent resident population, and some very smart and savvy shoppers.     If you would like more information on how amenities in your area could affect the price of your property, speak to your nearest office today. Click here to find yours.

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