Discounters Claim 10% Of UK Supermarket Sales

Aldi and Lidl hold 10% of UK grocery sales for the first time, according to industry figures which also show only Sainsbury (Amsterdam: SJ6.AS - news) 's growing sales among the 'big four' chains.

The Kantar Worldpanel statistics for the 12 weeks to 8 November had Lidl’s market share at a new high of 4.4% on sales growth of 19% over the past 12 months.

It (Other OTC: ITGL - news) said Aldi grew sales by 16.5%, keeping its market share at 5.6% for the fifth consecutive month.

At the same time, Kantar said sales fell at Tesco (Xetra: 852647 - news) , Morrisons and Asda - with market leader Tesco enduring a 2.5% decline.

Asda lost the most business, the report said, with sales down 3.5% while Morrisons' sales were 1.7% lower.

Fraser McKevitt, head of retail and consumer insight at Kantar, said: "Sainsbury’s has seen its fourth consecutive period of growth, flying in the face of tough market conditions.

"It’s 1.5% increase in sales was sufficiently ahead of the market for the retailer to increase its share by 0.2 percentage points - the first share gain registered by any of the ‘big four’ retailers since October 2014."

Waitrose and the Co-op also grew their sales - by 2.7% and 1.5% respectively.

Established chains have faced pressure to cut prices since after the recession when the discount chains began their assault on the shopping habits of UK consumers.

Aldi and Lidl have doubled their market share in just three years - expanding their offerings to more locations at a time when inflation has already been weak because of the collapse in world oil prices.

That has placed even greater pressure on supermarket profit margins as they move to compete with the pricing tactics of the discounters, with profits at both Tesco and Morrisons falling heavily.

Sainsbury's most recent profit figures were down but not as bad as their rivals.

Because Asda is part of Walmart and not listed in the UK, the company does not have to provide profit figures for its UK business.

Its own update today reported a 4.5% fall in like-for-like sales for the 13 weeks to 30 September.

Separate figures released by Nielsen (Frankfurt: NSLF.F - news) also made for poor reading at the top chains.

It said the continuing rise of the discounters meant the 'big four' experienced their biggest year-on-year fall in the value of sales for over a year in the four weeks to 7 November.

The information firm's UK head of retailer and business insight, Mike Watkins, said: "Heavy price-cutting to combat the discounters, coupled with deflation, is great news for consumers but increasingly problematic for the supermarkets, who are seeing less money going through the tills."

He added: "The percentage of sales from items on promotion has remained at 32% for another month, suggesting retailers are still committed to driving incremental sales through promotional activity when the market is in decline."