Aldi and Lidl end year as fastest growing supermarkets

Ivan Schwartz
January 10, 2018

Supermarket grocery sales rose by £1bn over the festive period as shoppers traded up to premium products.

Industry data from Kantar Worldpanel showed sales at Tesco rose by 3.1% in the 12 weeks to 31 December, well ahead of "big four" rivals Sainsbury's, Asda and Morrisons at about 2% each.

Fast-growing discounters Aldi and Lidl were the biggest winners over the period, with sales up at each by 16.8%. "Shoppers parted with GBP747 million on 22 December alone, making the Friday before Christmas the busiest shopping day ever recorded", said Fraser McKevitt, head of retail and consumer insight at Kantar Worldpanel.

As of 09:34 GMT, Tesco's share price had given up 1.77 percent to 210.50p, underperforming the benchmark FTSE 100 index, which has climbed marginally into positive territory and now stands 0.29 percent higher at 7,719.09 points. "Only 36% of spending was on items on offer this year - the lowest level of promotional activity at Christmas since 2009".

The other members of the Big 4 - Sainsbury's, Asda and Morrisons - all saw gains of about 2% as overall sales for the sector rose 3.8% to £28.9bn compared to previous year.

"Overall supermarket sales increased in value by 3.8 per cent, with an additional £1 billion ringing through the tills compared to the same festive period a year ago", Kantar Worldpanel head of retail Fraser McKevitt said. Aldi's market share rose to 6.8% from 6.0%, while Lidl's increased to 5.0% from 4.4%, Kantar said.

"Rising to the challenge, Aldi and Lidl collectively managed to attract almost one million additional households during the past three months", he added.

The numbers also marked the company's fastest sales growth since June, with performance helped by a 6.4-percent increase in sales of standard Tesco own label.

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Nielsen's data also showed that grocery spend in the four weeks ending December 30 hit £10.5 billion, a 3.7 per cent year-on-year rise. This compares to sales growth for the big four United Kingdom supermarkets of 3.1% for Tesco PLC, 2.0% for J Sainsbury PLC, 2.1% for WM Morrison Supermarkets PLC, and 2.2% for Asda, part of Wal-Mart Stores Inc.

Morrisons increased sales by 2.1% - with strongest growth coming from ambient and frozen foods - though the grocer's market share fell by 0.2 percentage points to 10.7%.

This is against the backdrop of the retailer's continuing strategy of moving away from promotions, selling 5.6 per cent fewer items on offer than during the same period a year ago.

"Overall supermarket sales increased in value by 3.8%".

The festive boost to supermarkets came amid a far bleaker first half of winter on the high street.

Overall online supermarket sales enjoyed their biggest ever Christmas: up 4.9 per cent year-on-year.

Online sales played a key part, with 18 per cent of households shopping online for groceries in December (up from 16 per cent last year).

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