Cut-price stores winning hearts

Retail analysts claimed the results showed that the European "hard discount" model, with fewer product lines sold at rock-bottom prices, had finally found favour with the public after landing on British shores in the early 1990s.

John Lewis and Waitrose emerged as Britain's favourite high street shops in the poll, with four out of five customers saying they were happy with the service. Marks & Spencer, local electrical shops, Waterstone's, Body Shop, Jessops, and Ikea also earned high levels of approval.

But with the exception of John Lewis, the top six companies struggled on price - an area the German discounters scored well on, Which? said.

The success of the German imports has been ascribed to their enormous buying power, which allows them to sell groceries at up to 30% cheaper than some rivals.

But Aldi was at pains yesterday to stress its success in selling luxury goods ranges: sales of fresh ground coffee went up by 20% last year and, at Christmas, when it sold 2.5 million packets of smoked salmon and 50,000 lobsters in three days, the company said.

Tony Baines, managing director of buying at Aldi, said it was becoming known as an "up-market discounter". He said: "We offer great everyday essentials and our customers love the fact that they can also buy luxury products as well."

Professor Leigh Sparks, director of the Institute of Retail Studies at Stirling University, said Aldi and Lidl had enjoyed success with a simple business model that customers could understand. But the companies had also adapted their approach to fit with the expectations of British consumers, he said.

"It's interesting that Aldi have changed their brand strategy; rather than stocking foreign-sounding brand names that customers didn't recognise, it has marketed its own home brands which have hit customer expectations more closely. They look more like Tesco's own brands," Professor Sparks said.

"If you look at the original Aldi stores in Germany, they have a very austere approach. Some just have a front door and no windows. If you look at the new Aldis in the UK they have a very different feel: windows, glass fronts, car parking spaces at the front. They have learned what the British customer does and doesn't like."

Richard Ratner, of Seymour Pierce stockbrokers, said Aldi and Lidl had replaced Kwiksave as the UK's favourite discounters. "Their stores are much better and cleaner," he said.

The two companies account for nearly 5% of the UK grocery market share - a far cry from the optimistic predictions from some analysts in the early 1990s that they would replicate the dominant position they hold in countries such as Germany and Denmark. Stiffer competition from the four biggest supermarkets, which have launched their own no-frills labels, is thought to have hampered the discounters' early development.

But both companies saw sales increase by around 15% last year and have announced aggressive expansion plans in Scotland.

Aldi, which is opening its 29th Scottish store in Oban today, aims to have 150 shops north of the border by 2014. Lidl last year announced plans to double its portfolio of 77 stores in Scotland over the next 10 years.

The Which? survey found that some older British high street names, including WH Smith, Comet, Co-op, Woolworths, MFI, Currys, and Somerfield, had scored badly with customers.

The worst performing shop out 50 surveyed was JJB Sports. One customer described the shops as "crowded and messy, clothes on the floor, and staff unknowledgeable about stock and its location".

Meanwhile, swapping a basket of supermarket own-brand groceries for organic adds around £5 to the cost, researchers found.

It rises by nearly £10 when supermarket economy items are upgraded to pesticide free, according to Which? magazine. A whole raw chicken costs on average just £2.75 for the supermarket economy version, rising to £5.51 for free range and £6.87 for organic free range.

The products surveyed by Which? included eggs, butter, milk, chocolate and chicken.