Savvy shoppers help discounters raise market share

Hard-pressed families are flocking to Aldi and Lidl as the discount stores continue to increase their share in the Irish market.

The pair are enjoying record levels of market share over recent months — 8.5% and 8.3% respectively, up from 7.4% and 7.5% last year.

The increases are revealed in the latest supermarket share figures for Ireland from Kantar Worldpanel, and relate to the 12 weeks ending September 14.

The discounters’ impressive performance show increases of 15.1% for Aldi and 12.3% for Lidl over the past year. Their total share of the market jumped to 16.8% in the past year from 14.9% last year.

Among the larger groups, Dunnes posted impressive results, attracting more shoppers with its round euro deals. It maintained its place in the market, holding firm at 22.1% over the past year.

SuperValu also drew in more shoppers thanks to a strong own-brand offering, enticing an additional 40,000 customers into its stores over the past year, although its share of the market has fallen slightly from 25% to 24.7% in the past 12 months.

Reduced in-store customer spend meant a slight dip in sales for the retailer compared with last year.

The Kantar study found, on average, SuperValu customers have reduced their spending by €16 over the 12-week period by choosing more own-brand products.

Tesco remains the dominant retailer in the Irish market, but its share has fallen from 26.7% to 25.2% year-on-year. Shoppers are continuing to choose Tesco, increasing the number of trips they make to the leading retailer. However, Kantar found that customers’ in-store spend fell by almost €2 on average over the past year.

Tesco also hit the headlines in the past few weeks after the company overstated its profits to the tune of some £250m.

Kantar Worldpanel commercial director David Berry said the results highlight how Aldi and Lidl continue to be the standout performers in the market.

“Aldi and Lidl have both enjoyed record levels of market share over recent months and this strong performance has continued thanks to increased footfall over the past 12 weeks,” said Mr Berry. “Lidl has attracted 41,000 new shoppers this quarter as shoppers were enticed by back-to-school offers.

“Meanwhile, Aldi’s sales have been boosted as more shoppers chose to visit the retailer for their main grocery shop, with customers increasing their spend by €1.20,”

Mr Berry said Dunnes was the strongest performer of the larger grocers with sales rising for the fifth consecutive month.

“Dunnes has posted the strongest results among the larger grocers, enjoying increased sales for the fifth successive month,” he said. “A rise in the number of round euro-priced branded goods on sale has drawn customers into its stores, contributing an additional €15m in sales for the retailer. Some 37% of branded goods sold in Dunnes are now on sale at a clear round euro price point, compared with just 32% last year.”

Advertising spending

Aldi and Lidl now account for nearly half of the advertising share of the spend in the grocery trade. The latest ‘Supermarket Ad Tracker’ report, produced for Checkout magazine by Nielsen, found that, in the second quarter of this year, Lidl made up 24.5% of supermarket ad spend (down 0.5 points on the same quarter last year), while Aldi made up 22.6% of the market (up 7.6 points).

By contrast, Tesco accounts for 17.3% of supermarket ad spend (up 3.2 points) while SuperValu percentage spend was 20.5% (down 0.3 points). Dunnes Stores related to 9.6% of the grocery advertising market.

The study found Aldi increased its advertising spend by 95.8% on a year earlier, a rise well ahead of competitors (Tesco +59.7%, SuperValu +27.8%, Lidl +27.6%, Dunnes +8.5).

In terms of the media channels, newspaper and other print had 52% of the market, TV had 38%, radio was on 8% and outdoor was at 3%. The editor of Checkout, Stephen Wynne-Jones, said the figures showed Aldi and Lidl are pushing to outdo the competition.

“While Aldi and Lidl’s market share is considerably lower than that of their mainstream competitors, both discounters continue to ‘shout louder’ than the rest of the industry when it comes to marketing presence,” said Mr Wynne-Jones.

“As evidenced by their presence at last week’s National Ploughing Championships, the discounters are seeking to not only win the price battle, they’re also looking to engender strong quality associations as well.”