Trouble for the big four supermarkets as Aldi and Lidl growth speeds up again
German discounters Aldi and Lidl both saw growth rates return to over 17 per cent over the last three months, dashing hopes for the Big Four that a slowdown earlier in the year may have been part of a longer term trend.
The cut-price chains have been the fastest-growing grocers in the sector for some time now. But in May the pair saw sales fall below 10 per cent for the first time since 2010, suggesting that the millions of pounds spent on price cuts by the traditional grocers were paying off.
However data released today by Kantar Worldpanel shows that sales growth at Lidl accelerated again to 17.9 per cent in the 12 weeks to October, taking its market share to a new record high of 4.3 per cent. Bigger rival Aldi posted equally impressive growth, with revenues up 17.6 per cent on a year ago, giving it a 5.6 per cent share of the market.
Aldi's joint managing director for buying Jonathan Neale, said: "So far this year we’ve welcomed more than 800,000 new customers to our stores – all people who have previously never shopped with Aldi. This rate of customer acquisition is set to continue as we open more new stores across the UK.”
Sainsbury’s was the only one of the larger supermarkets to post sales growth in the period as a strong performance in its online and Local stores helped it to increase revenues by 1.1 per cent. Its market share, however stayed flat at 16.1 per cent.
Sales at Morrisons fell by one per cent year-on-year, taking its market share to 10.8 per cent while Tesco fell by 1.7 per cent. The struggling chain, which has stepped up competition after launching a new "immediate" price match promise on branded goods last week, saw its market share fall to 28.1 per cent from 28.8 per cent in the same period last year.
Britain's second biggest chain, Asda was the biggest faller, down three per cent, bringing its market share down by 0.7 percentage points to 16.6 per cent. The retailer yesterday announced it was scrapping plans to expand in London in favour of revamping its existing stores after posting its worst ever quarterly result in August.
Fraser McKevitt, head of retail and consumer insight at Kantar Worldpanel, said: “With like-for-like grocery prices 1.7 per cent lower than last year, the supermarket price war shows no signs of abating.
"Consumers have now enjoyed more than 12 months of continually falling prices and are currently pocketing these benefits rather than splashing out on substantially more grocery items, with overall volume growth of only two per cent. This equates to £1.5bn taken out of the market in the last year, saving each household £58 on average.”