Supermarket wars: Lidl and Aldi gain ground on Tesco as bargain-hunting Brits battle grocery inflation
Lidl is the UK’s fastest growing supermarket as bargain-hunting Brits turn to the discount grocer during the cost of living crisis.
With grocery inflation now at 15 per cent, new figures published by Kantar this morning show value outlets have seen an uptick in sales last month.
Sales in the German supermarket Aldi rose 25.8 per cent in the four weeks leading to 19 March and it achieved a market share of 7.4 per cent.
As households now face an £837 increase in their annual shopping bills, rival Aldi also took a new record market share this month at 9.9 per cent which was driven by a 25.4 per cent increase in its sales.
Aldi and Lidl target London
It comes as the pair said they were set to open a flurry of new sites across the nation this year, and Aldi previously said it was eyeing 60 new sites in London alone.
Fraser McKevitt, head of retail and consumer insight at Kantar, told City A.M that this roll out helps make the discounters “available” to more retail customers, which in turn will boost sales.
“Aldi reached a new record high market share this month, and in the coming months it looks likely they’re going to reach 10 per cent market share,” he continued.
Since the pair’s arrival in the UK in early 1990s the German retailers have become synonymous with selling goods cheaper than more recognised supermarkets such as Tesco and Sainsbury’s
Currently a pint of milk Aldi sells for £1.19 compared to Tesco which is priced at £1.65.
However, the data showed that Tesco remained Britain’s largest grocer with a 26.9 per cent share of the market, overruling rival’s Sainsbury’s which sat at 14.8 per cent .
McKevitt, said: “Outside the discounters Aldi and Lidl, branded goods still make up 52 per cent of the market and sales grew by 7.2 per cent over the past month, the fastest rate we’ve seen since February 2021.
“Many brands are innovating and bringing new products to the shelves to maintain their popularity, and 10 per cent of their sales in the last year came from new or updated items.”
Battling inflation
It comes as grocery price inflation has soared 17.5 per cent over the past 12 weeks, owing in part to food shortages of fruit and vegetables earlier in the year.
This morning it was reported that shop price inflation is yet to reach its “peak” as the rising cost of sugar and high manufacturing costs present a double whammy ahead of crucial Easter trade.
The British Retail Consortium (BRC) shop price index showed annual inflation accelerated to 8.9 per cent in March, up from 8.4 per cent in February – a fresh high for shoppers who have had no relief from soaring living costs.
Food inflation also continued to sky rocket in March, rising to 15 per cent from 14.5 per cent in February – the highest rate on record.
Myron Jobson, Senior Personal Finance Analyst, interactive investor, said: The consensus among various studies that track shop prices is food inflation is running hot, and continues to be one of the most painful and visible aspects of inflation for many households.
“There is no escaping food inflation as part of what’s fuelling it are price jumps in everyday larder products, such as milk, pasta, bread and eggs.
“Rising prices are changing the way we shop. Baskets are getting smaller and more of us are ditching premium brands for cheaper alternatives. Stubborn food inflation has also left shoppers with a slim appetite for ‘nice-to-have’ goods.
Tesco has been asked for comment.