Lidl makes inroads in UK markets

Lidl has leapfrogged upmarket supermarket Waitrose in the UK’s competitive food retail market, industry data showed yesterday, a sign that cash-strapped UK shoppers are still having to count their pennies.

Lidl and rival German discounter Aldi have steadily cut into the market shares of the UK’s big four supermarket chains — leader Tesco, Sainsbury’s, Asda and Morrisons — with aggressive store openings fuelling their sales growth.

The two discounters started opening stores in the UK in 1994 and 1990, but their big breakthrough came when the economic crisis hit in 2008 and more British shoppers were prepared to give them a go.

In February, Aldi overtook the Co-operative to become the UK’s fifth largest supermarket and yesterday Lidl recorded a market share of 5.2% becoming the seventh largest player, market researcher Kantar World-panel said, usurping Waitrose. Waitrose has a loyal middleclass clientele but even it has felt the effect of Aldi and Lidl, which have pushed prices down across the sector.

Kantar Worldpanel said Lidl’s sales rose 18.9%, year-on-year, in the 12 weeks to August 13, while Aldi’s sales rose 17.2%, giving it a market share of 7%.

“Ten million households visited Lidl’s expanding network of stores during the past 12 weeks, with alcohol and fresh produce performing particularly well,” said Kantar Worldpanel’s Fraser McKevitt.

He said that Aldi attracted 1.1 million more shoppers through its doors than this time last year.

“Rising food price inflation continues to stretch household budgets and as a result consumers are increasingly focusing on the price that they pay at the till,” Matthew Barnes, chief executive of Aldi UK and Ireland, said.

Though all of the UK’s big four grocers increased sales for the fifth consecutive period — a run of success not seen since 2013 — it partly reflected grocery price inflation and they still all lost market share to the discounters.

The big four now account for 69.3% of the UK grocery market, down from 76.3% five years ago.

“That looks set to fall further in the coming months,” said Mr McKevitt.

Reuters


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