Massive rise in fresh food sales helps discount retailers gain market share

SHOPPERS are flocking to discount retailers, Aldi and Lidl, which now have 10% of the grocery market.

Figures from Kantar Worldpanel in Ireland for the 12 weeks ending April 17, 2011, show that the German-owned discounters are continuing to surge forward in the market, at the expense of other retailers.

Aldi leads the market in terms of growth, increasing value sales by 27.5% compared with last year. Lidl also outperformed the market, posting the second highest growth rate of 8.3%, a significant increase from February of this year when growth was only slightly ahead of the market at 3%. Both retailers increased their market shares, from 3.3% to 4.2% for Aldi and 5.7% to 6.1% for Lidl, compared to this time last year.

Commercial director with Kantar Worldpanel Ireland, David Berry, said Aldi and Lidl’s growth seems to be driven by customers’ increasing trust in their fresh food offering.

“Both retailers have seen phenomenal growth of 45% for Aldi and 37% for Lidl over the last three months, in their fresh meat, poultry and fish categories.

“However, if both retailers want to continue to gain market share they will have to entice more customers to their stores on a more regular basis. Currently shoppers visit Tesco and Dunnes on average more than once a week. In comparison, the average shopper only visits an Aldi or Lidl every other week — fresh food provides these two retailers with an incentive for customers to shop there more regularly.”

Superquinn suffered negative sales of 5% in the same period and its market share fell from 6.9% last year to 6.4% this year.

Overall market growth increased slightly since the last period to 1.1%, with Tesco also posting a minor growth increase of 1.6%.

Tesco expanded its market share from 26.9% last year to 27.1% while Dunnes and SuperValu dropped market share slightly compared to last year, from 23.7% to 23.6% and 19.8% to 19.5% respectively.

Grocery inflation is at 5.4% for the 12 weeks to April 17, up from 5.3% in the previous period.