Discount supermarkets Aldi and Lidl continue to challenge the UK’s traditional big supermarket.
The threat of Aldi and Lidl has triggered a recent series of multi-million pound investments from big supermarkets committed to cutting down prices as they bid to attract consumers that have become less brand-loyal and want to shop around for the best deals.
Overall, like-for-like prices dropped by 0.9% year-on-year due to the ongoing price war and lower commodity costs, according to the latest grocery share figures from Kantar Worldpanel. But that hasn’t stopped retailers including Morrisons, Sainsbury’s, and Tesco posting diabolical festive trading updates this month.
At the other end of the scale, while their sales growth is coming from a lower base, it’s clear to see that the consistently low-cost Aldi and Lidl were the Christmas supermarket winners this year, with their sales growing 22.6% and 15.1% year-over-year respectively in the 12 weeks to Jan. 5.
Meanwhile, all the other major supermarkets (bar Waitrose) saw sales declines over the important festive sales period, according to the Kantar data.
Competition was so fierce amongst the big four that Sainsbury’s — despite seeing a 0.7% drop in sales in the latest quarter — became Britain’s second largest grocer for the first time since it lost the position to Asda in 2003. Sainsbury’s ended the period with a 16.9% share of the supermarket sector, while Asda had a 16.8% share. However, Kantar predicts this is only a seasonal upset and that Asda will reclaim its number two spot in the forthcoming quarter.
Waitrose, the UK’s high-end retailer which traditionally performs well over Christmas as consumers trade up to luxury items, continued its strong sales growth.
Kantar Worldpanel GB Market Share, 12 Weeks To 04 January 2015 (%)
Here’s the same chart from last year, just look how Aldi and Lidl are edging up on the major supermarkets.
Kantar Worldpanel GB Market Share, 12 Weeks To 05 January 2014 (%)
Here’s the latest data from Kantar in full:
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