I doubt there will be a segment in between in the future.

In Germany even millionaire households shop at Lidl or ALDI because nobody needs 50 types of ketchup or milk. People don't like wasting lifetime when shopping and don't like to select one type of milk out of 20 different types in a wide price range that almost taste like the same. There is no USP for many different products except for their label/branding/image.

This transition took quite some time but the high turnover volume at hard discounters usually also means fresher vegetables and fruits.

ALDI and Lidl stores usually get supplies multiple times per day and have almost no local stock besides what's in the stores.

Yes, I agree. In the UK they had a bad reputation at first for being low end. Now a lot of the middle classes shop at the stores, the parking lot is often full of Audi's and other high end cars.

The quality of the food in general is very good, often better than the competitors, plus it's cheaper.

Keep in mind Aldi/Lidl have went from 0% marketshare in the UK to >12% in about 20 years - very impressive growth.

I agree. How could a store that has a full range of products, with many organic options, at reasonable prices not succeed as well.

Whole Foods is too pricy for me for a full grocery shop but I can afford and like to eat better than discount stores.

Going forward, I would bet on the middle market shrinking.

I wouldn't underestimate the number of people whose buying strategy is "cheap, but not the bottom".

ALDI and Lidl are not the bottom. In Germany they outperform traditional super markes in many quality tests. The key is the lean store/logistics scheme to reduce costs, not to sell crappy products. This combination is almost unbeatable, especially when carried out in a responsible manner: Only the right locations, own the property, no man in the middle (think of all the US high yielding retail mall REITs), only selective use of advertisement.