Discount retailers close the gap

The rise of Lidl and Aldi has continued, as the discount retailers increase the consumer spend they are attracting at the expense of established supermarkets like Tesco and Dunnes.

The country’s largest supermarket chain, Tesco, has seen its market lead slip to just 0.8% as it continues to attract shoppers but their spend falls, according to Kantar Worldpanel.

Commercial director at Kantar Worldpanel, David Berry, said that Aldi and Lidl have managed to get their consumers to spend more.

“Aldi has maintained a growth rate of over 20% throughout 2014. This has boosted its market share from 6.4% last year to a record 7.9%. Aldi has capitalised by capturing more spend from its shoppers. Each shopping trip has grown by an average €2 per trip with two additional items being added to baskets,” he said.

Kantar reported that Tesco and Dunnes have experienced sales declines of 6.6% and 3.9%.

SuperValu challenged Kantar’s findings that sales had fallen by 1.6%. The Cork based company said that customers switching to cheaper own brand products were responsible for the fall in the value of sales.

Managing director of SuperValu, Martin Kelleher said that following the rebranding of the Superquinn stores they had driven down the cost of groceries.

“Since renaming the 24 Superquinn stores, we have seen an increase in footfall in store due to the better value available in store, primarily due to the popularity of the SuperValu Own Brand range.

“As shoppers have taken advantage of the excellent value on offer in terms of price reductions, promotions and Own Brand, the average cost of a grocery basket has been driven down,” he said.

While overall, Kantar reported that the grocery inflation rate was at 1.9% for the quarter, Supervalu expects that customer habits will result in deflation in their sales due to customer behaviour.