‘Aldi effect’ spells tough year for travel industry

‘Aldi effect’ spells tough year for travel industry

This year will be tougher for travel than 2008 and the trade should prepare for an ‘Aldi effect’ as consumers trade down.

Analyst Mintel suggests this will be reflected in increased demand for cheaper destinations, out-of-season breaks, camping, hostels and all-inclusive trips.

German low-price supermarket chain Aldi and rival Lidl have seen UK sales soar in the past two years as they undercut established high-street names.

Mintel notes holidays remained a priority for consumers last year despite deepening economic gloom. However, an online survey of 2,000 users last July suggested a majority (62%) plan to cut holiday spending.

Only spending on treats, restaurants, takeaway food, snacks and DVDs rated higher in a list of priorities for cutting back.

The survey was conducted before the meltdown in high-street banking last October and Mintel notes: “Holidays rank relatively high up the list of items where spending might be cut.”

This contrasts with other consumer surveys suggesting travel remains a high priority, including a Mintel/NOP survey in January last year that found holidays were a top priority – 23% of UK adults rating a major foreign holiday their number one priority, up five percentage points on 2005.

That was considerably higher than the proportion prioritising home improvements (18%), buying clothes (15%), improving the garden (14%) and paying off loans (13%) or the mortgage (12%).

Mintel concludes: “Some form of holiday will remain a high priority for around two-thirds of the population. However, reduced spending is likely. Consumers are likely to reduce the amount of supplementary holidays they take.”


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