Discounters Aldi and Lidl outperform grocery market

GERMAN discounters Aldi and Lidl are making significant inroads in the Irish grocery market with Lidl matching long-standing retailer Superquinn’s market share for the first time.

Up-to-date data on the Irish grocery market from Kantar Worldpanel covering the 12 weeks ending June 12, 2011, shows Aldi and Lidl posted significant sales growth of 27% and 9% respectively, the discount retailers outperforming the market. Aldi increased its share from 3.4% last year to 4.3% and Lidl improving on last year’s 5.7% share to secure 6.1% of the market. Lidl’s 6.1% of the market is now the same as Suprequinn who have fallen from 6.7%, according to Kantar.

The march made by Aldi and Lidl is impressive in a market which grew by just 1% as shoppers sought value. Commercial Director at Kantar Worldpanel Ireland David Berry, said: “Customers are adopting savvy shopping tactics in response to increasing pressures on household budgets. Shoppers are buying fewer groceries to counter product-driven price inflation or ‘trading down’ to cheaper, essential products and switching to the discount retailers. Without the World Cup to boost spending in the market we may see a real possibility of sales decline throughout the summer.”

Mr Berry said Lidl’s surge in growth has now lifted its share to equal that of Superquinn at 6.1% for the first time. “Aldi’s phenomenal growth has also narrowed the share gap between the retailer and Lidl, from 2.2 percentage points from growth last year to just 1.8 percentage points this year — establishing Aldi as a further challenger to Superquinn,” he said.

Mr Berry said Dunnes and Tesco posted only slight sales growth, of 0.3% and 1.6% respectively while SuperValu has felt the pressure faintly this period, posting negative sales growth of nearly 1% and dropping market share to 19.7% compared with 20% last year.

“Superquinn continue to suffer, particularly within the Leinster region as a result of the closure of their Naas store early this year. It is a balancing act for retailers and brand owners,” added Mr Berry.

Kantar’s calculate grocery inflation at 3.9% for the 12 week ending period June 12, down from 4.9% in the previous period. It said this figure is based on over 75,000 identical products compared year-on-year in the proportions purchased by Irish shoppers.