Kira Nerys/Wikimedia

Aldi and Lidl now command 10% of the grocery market

The German discounters are causing big headaches for Tesco et al.

by Jack Torrance
Last Updated: 12 Jan 2016

Discount supermarkets Aldi and Lidl have been growing rapidly for some time, but that’s always been from a small base. Today it emerged that for the first time they have carved out a double-digit share of the grocery market as shoppers have flocked to their super-low prices. 

The German companies now control 10% of Britain’s grocery market – up from 5% in 2012 – and they show no sign of slowing. Aldi’s sales in the 12 weeks to November 8 were up 16.5%, while Lidl’s rose 19%.

‘In the last 12 weeks the two retailers have attracted another additional million shoppers compared with last year while average spend per trip has increased by 4% to £18.85, which is 78p ahead of the total retailer average,’ said Fraser McKevitt, Kantar Worldpanel’s head of retail and consumer insight. 'The discounters show no sign of stopping and with plans to open hundreds of stores between them, they’ll noticeably widen their reach to the British population.’ 

That’s obviously bad news for the incumbent market leaders. Tesco, Sainsbury’s, Asda and Morrisons have all had to react; cutting costs to keep penny-pinchers coming through the doors, but not so much that it damages their brands.

At the moment it looks like only of the ‘Big Four’ is getting that balance right. Sainsbury’s 1.5% sales growth looks pretty paltry compared to Aldi and Lidl, but is much better than its competitors, whose sales are all going into reverse.

Morrisons’ sales were down 1.7% and sales at Tesco, which had been enjoying something of a resurgence, were down 2.5%. None have suffered quite so much as Asda though, where revenues slipped 3.5% - watch out for a trading update from its parent company Walmart later today to see if its own figures look any less dire. All this woe has been a boost for Sainsbury’s, which increased its market share for the first time since October 2014, by 0.2 percentage points. 

‘Sainsbury’s performance means it has once again regained its position as Britain’s second largest supermarket, pushing ahead of Asda in the latest 12 weeks,’ McKevitt added. ‘The food-focused retailer traditionally increases its market share over Christmas, so we can expect to see it keep hold of second place for the time being.’ That ‘purrfect’ Christmas advert probably won’t hurt either.

Find this article useful?

Get more great articles like this in your inbox every lunchtime

Upcoming Events