Yahoo Finance Aldi and Lidl increase share of British shoppers as inflation hits spending
Aldi and Lidl account for £1 in every £8 spent in UK supermarkets, with two-thirds of British shoppers visiting the discounters over the past three months.
The German chains are outpacing their bigger rivals as inflation and stagnating wages eat into families’ spare cash, prompting many to seek ways of saving money.
The discounters are also rapidly opening new stores while traditional supermarkets have closed outlets amid the growing popularity of internet shopping.
Ocado, the online supermarket, notched up a 14.3% rise in sales to £344.5m in the three months to 27 August. The company’s share price slid 1.6% as it revealed that growth was accompanied by the rising cost of building infrastructure to deliver its goods while the average size of customer orders had slipped back.
Lidl was the UK’s fastest growing grocery chain in the three months to 10 September. Its sales increased 19.2%, taking its market share to a new high of 5.3%, according to the latest figures from Kantar Worldpanel. It achieved strong sales of fresh and chilled goods including dairy, white and rosé wine.
Despite the strong growth, seasonal fluctuations in trade mean it is back on a par with Waitrose, where sales rose 2.4%, after overtaking the chain last month.
Aldi’s sales gained 15.6%, taking its market share to 6.9%. The grocer has widened its lead on the Co-op, where sales fell for the second month in a row after it sold 300 small stores to McColl’s.
In the past three months, almost 63% of shoppers visited one of the discounters, up from 58.5% last year. Their market share has risen to 12.2%, a surge from less than 10% only two years ago.
All the large grocery chains are benefiting as food price inflation, which emerged in January after more than two years of price falls, remains above 3%. Prices rose 3.2% in the period, partly as a result of the fall in the pound since the Brexit vote. The volume of goods sold also rose, increasing total market sales by 3.6%.
It is the sixth consecutive month in which sales have risen by more than 3%, with all four of the large supermarket chains – Tesco, Sainsbury’s, Asda and Morrisons – reporting an increase in business.
Fraser McKevitt, head of retail and consumer insight at Kantar Worldpanel, said: “We haven’t seen sustained market growth of this kind since May 2013.”
The growth came despite disappointing August weather, which hit sales of traditional summer foods. Prepared salad fell 6%; scotch eggs and suncare products were down 16%.
However, shoppers spent almost £4m on cold and flu remedies in August – an increase of almost £2m on the same month last year.
Tighter budgets have also spurred consumers to buy fewer big brands. Spending on supermarket own-label products such as Tesco Finest and Sainsbury’s Taste the Difference rose 5.5% year on year in the three months to 9 September, according to analysts at Nielsen.
