Lidl and Aldi see sales soar amid economic downturn
(The Independent) -- The credit crunch is persuading an increasing number of British people, including the middle classes, to shop at the discounters Aldi and Lidl, the latest TNS Worldpanel data has revealed.
The market research company found that, along with the frozen-food specialist Iceland, the two discounters are powering ahead of their rivals in the UK grocery sector.
Aldi was the top dog, growing its sales by a whopping 20.7 per cent, based on the value of till-roll sales, for the 12 weeks to 15 June. The increase gave Aldi its record share of the UK grocery market at 2.9 per cent.
While Lidl's sales increase of 12.8 per cent is below Aldi's, it is still well ahead of Tesco, Asda, Sainsbury's and Morrisons.
Steve Gotham, project director at Allegra Strategies, said: "Clearly the economic circumstances in the UK are playing into the hands of the discounters. They are appealing to new customers and those new customers are coming from more middle-class back grounds."
Mr Gotham said that both Lidl and Aldi have moved away from their "first-generation hard-discounter proposition" by opening in better locations and sprucing up their stores, making them lighter and more appealing. They have also enhanced the quality and breadth of their ranges.
In particular, he said that Aldi has ramped up its advertising around its enhanced premium product range to attract a wider variety of customers into its stores.
In other areas of the grocery market, the frozen-food specialist Iceland continues to grow its sales and market share. Mr Garner said: "There is also a bit of a rebirth in frozen food." TNS Worldpanel reported that Iceland grew its sales by 12.4 per cent, giving it a 1.7 per cent share of the total grocery market, for the 12 weeks ending 15 June.
Among the big four, Sainsbury's delivered the weakest sales growth at 4.3 per cent for the 12 weeks to 15 June, which was behind Tesco's 5.1 per cent, Asda's 7.5 per cent and Morrisons' 8.1 per cent. Greg Lawless, an analyst at Blue Oar, said: "We have concerns that Sainsbury is starting to find life a lot tougher in the sector, given the inflationary headwind and consumer outlook. In a polarised market, Sainsbury is stuck in the middle ground without a strong price message."
The market research company found that, along with the frozen-food specialist Iceland, the two discounters are powering ahead of their rivals in the UK grocery sector.
Aldi was the top dog, growing its sales by a whopping 20.7 per cent, based on the value of till-roll sales, for the 12 weeks to 15 June. The increase gave Aldi its record share of the UK grocery market at 2.9 per cent.
While Lidl's sales increase of 12.8 per cent is below Aldi's, it is still well ahead of Tesco, Asda, Sainsbury's and Morrisons.
Steve Gotham, project director at Allegra Strategies, said: "Clearly the economic circumstances in the UK are playing into the hands of the discounters. They are appealing to new customers and those new customers are coming from more middle-class back grounds."
Mr Gotham said that both Lidl and Aldi have moved away from their "first-generation hard-discounter proposition" by opening in better locations and sprucing up their stores, making them lighter and more appealing. They have also enhanced the quality and breadth of their ranges.
In particular, he said that Aldi has ramped up its advertising around its enhanced premium product range to attract a wider variety of customers into its stores.
In other areas of the grocery market, the frozen-food specialist Iceland continues to grow its sales and market share. Mr Garner said: "There is also a bit of a rebirth in frozen food." TNS Worldpanel reported that Iceland grew its sales by 12.4 per cent, giving it a 1.7 per cent share of the total grocery market, for the 12 weeks ending 15 June.
Among the big four, Sainsbury's delivered the weakest sales growth at 4.3 per cent for the 12 weeks to 15 June, which was behind Tesco's 5.1 per cent, Asda's 7.5 per cent and Morrisons' 8.1 per cent. Greg Lawless, an analyst at Blue Oar, said: "We have concerns that Sainsbury is starting to find life a lot tougher in the sector, given the inflationary headwind and consumer outlook. In a polarised market, Sainsbury is stuck in the middle ground without a strong price message."