Discounters Aldi and Lidl now account for more than 10% of all grocery sales
New data has shown that discounters Aldi and Lidl now account for more than 10% of sales at the UKs leading supermarkets.
According to data from global information and insights company Nielsen, Aldi’s sales grew by 17.3% year-on-year in the twelve weeks ending 31 January while Lidl’s sales rose by 13.8%. Total supermarket sales increased by just 0.7%. This meant that Aldi and Lidl hit a combined market share of 10.7% – or £1 in every £9.31 spent at UK supermarkets – up from 9.3% in the corresponding period last year.
“The 10% market share for discounters has not been seen since the heyday of Kwik Save some 15 years ago,” said Mike Watkins, Nielsen’s UK head of retailer and business insight. “Initially built on the premise of saving money, the new wave of discounters are now a regular part of grocery shopping and have changed shopping habits forever. For instance, switching to cheaper grocery brands is again the No 1 household tactic for saving money. Furthermore, nearly half of those cutting costs will continue to buy cheaper grocery brands even when economic conditions do improve.
“However, what is different this time is that discounters are no longer solely associated with price. They’ve been very astute at promoting the quality of their offerings to appeal to a wider range of consumers.”
Nielsen’s figures also show that Sainsbury’s spent the most on TV and press advertising in the four weeks ending 31 January with a spend of £4.6 million. This was just ahead of Aldi at £4.5 million. Meanwhile, M&S increased spend by the most, up 153% to £2.1 million, followed by Lidl with a rise of 138% to £2.4 million.
“The discounters’ rise in market share has been aided by investing heavily in advertising spend,” said Watkins. “In the 12 week period, for example, Aldi spent the most on advertising in relation to its market share. Lidl is third in this regard behind M&S.”
Aggregate sales value growth for the UK’s leading supermarkets during the four weeks ending 31 January was down -0.1% year-on-year. Unit sales continued to improve slowly, increasing by 1.7% year-on-year – the second consecutive four-week year-on-year increase.
Watkins added: “Price cuts at the start of month – a major focus in TV and press ads – encouraged shoppers back into stores, while category growths were helped by continued promotional spend. Shoppers took advantage of these giveaways, particularly stocking up on packaged soft drinks (volume sales +3.7%), household items (+2.4%) and grocery items (+2.0%).”
In the four-week period, Morrisons was the only one of the big four supermarkets to increase sales, helped by increased spend-per-visit and by attracting new shoppers. “This indicates that the launch of their loyalty price match card “Match and More” is having a positive impact on trading performance,” said Watkins.
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