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Aldi sales up as shoppers continue to trade down

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German discount food chain Aldi continues to be the UK grocery market’s big winner in these tough economic times, with new data showing that sales at the supermarket grew 25.1 per cent year-on-year in the 12 weeks to October 2nd 2011.

The business grew its market share by 0.5 per cent to 3.5 per cent during the period, continuing its rapid growth over the summer months, according to Kantar Worldpanel.

Last week Aldi revealed that despite losses accrued through renewing its store portfolios, its UK & Ireland business grew 4.6 per cent year-on-year in 2010 - and this positive sales momentum has continued throughout 2011.

Fellow European discounter Lidl has also seen trading jump significantly lately, with the company recording a 10.5 per cent annual uplift in sales over the 12 weeks analysed by Kantar.

The data specialists also revealed that the grocery market as a whole grew at 5.1 per cent, although this is still below the current level of grocery price inflation, which stands at 5.7 per cent.

Edward Garner, Director at Kantar, said: “The gap between inflation and growth has become a major feature of the grocery market as shoppers trade down to cheaper products and retailers strive to convince consumers they are combating inflation.

“As a result, those retailers with a low price message are the driving force in the market, with Iceland and Lidl enjoying sales growth of over ten per cent year-on-year, and Aldi leading the market with 25.1 per cent growth.”

Frozen food retailer Iceland actually saw the second largest increase in trading during the 12 weeks, with the up-for-sale business seeing market share rise 0.1 per cent and revenues jump by 10.8 per cent.

Of the larger grocers, Morrisons’ sales once again grew ahead of the industry average but it appears that the success of the cheaper supermarkets is eating into the business of leading retailers Tesco and Asda, with their respective shares of the sector reducing by 0.3 and 0.5 per cent.

“Morrisons posted the strongest growth of the big four this period but all of these retailers are responding to stretched household budgets with promotional initiatives,” explained Garner.

“Tesco launched its ‘Big Price Drop’ and Sainsbury’s is responding with its ‘Brand Match’ this week, which will give shoppers a refund coupon at the till if branded products are cheaper at Tesco or Asda.

“While it is too early to see the effect of these campaigns in the figures, future performance will be critical.”

Published on Tuesday 11 October by Editorial Assistant

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