Discount supermarkets make a comeback as shoppers feel pinch

Lidl and its rival discounter Aldi left the bigger supermarkets lagging behind with double-digit sales growth over the last three months as consumers sought bargains the face of rising prices.

Lidl's sales surged by 13.6 per cent, while Aldi saw a 13.4 per cent uplift in the 12 weeks to 20 February, far outstripping the pace at Sainsbury's, which led the bigger chains with 5.2 per cent growth, according to the latest industry figures from the market researcher Kantar Worldpanel.

The strength came against the backdrop of sluggish economic growth and rising prices, with grocery inflation rising to 3.7 per cent over the 12-week period, compared with the 3.1 per cent reported last month.

Just last week, the soft drinks manufacturer Britvic raised its forecast for price rises as it faced up to what it termed "unprecedented" inflation in the cost of key commodities.

Overall, market growth slowed to 3.9 per cent, against 4.2 per cent last month, indicating growing caution among consumers. Of the big four, Morrisons was second only to Sainsbury's with market-beating sales growth of 4.5 per cent. Tesco and Asda underperformed the market, with growth of 3.5 per cent and 3.1 per cent respectively.

Kantar retail analyst Fraser McKevitt said the strength of the discounters was, for now, down to higher spending by existing customers. "With economic uncertainty increasingly in the news it is no surprise that shoppers are being cautious with their spending," he said. "While the discounters are performing well, this is not due to an increase in new shoppers, but rather because their existing customers are spending more with them.

"The majority of people continued to seek value through promotions in the mainstream retailers." Growing sales fed through to a bigger chunk of the market for the discounters, with Aldi expanding its market share to 3.1 per cent, up from 2.8 per cent last year, and Lidl growing its share to 2.4 per cent from 2.2 per cent. Of the bigger players, Sainsbury's continued its strong run. The supermarket group has been expanding its share every month since March 2009.

The latest figures show another increase, taking its share to 16.5 per cent, compared with 16.3 per cent last year. Morrisons stood firm with a 12.3 per cent share, while Tesco and Asda boasted shares of 30.3 per cent and 16.9 per cent respectively.

Waitrose grew its market share to 4.4 per cent, the highest in its history and slightly ahead of the 4.3 per cent seen last year. The chain also managed to grow sales by 6.6 per cent, ahead of the big four, but behind its record of double-digit performances for much of the past two years.

Separate figures from Nielsen also showed that shoppers were being hit by higher prices – and that retailers were doing their best to entice consumers by putting on promotions, which made up an increasing share of the value of sales.

In contrast, overall volume growth across the sector in the four weeks to 19 February had remained subdued at 0.7 per cent, reinforcing the picture of a cautious consumer. A similar trend was seen at the height of the recession a year or so ago.

"As expected, shoppers are feeling the squeeze," Mike Watkins, Nielsen's senior manager for retailer services, said. "Our numbers indicate that people have begun to shop around more and are looking for savings when they visit a supermarket – this is indicative of a consumer actively looking for trade-offs."

PROMOTED VIDEO
News
ebooksNow available in paperback
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Reach Volunteering: Trustee – PR& Marketing, Social Care, Commercial skills

Voluntary Only - Expenses Reimbursed: Reach Volunteering: Age Concern Slough a...

Reach Volunteering: Charity Treasurer

Voluntary Only - Expenses Reimbursed: Reach Volunteering: Crossroads Care is s...

SThree: Trainee Recruitment Consultant - Soho

£20000 - £25000 per annum + OTE £35,000: SThree: We consistently strive to be ...

Ampersand Consulting LLP: Markit EDM (CADIS) Developer

£50000 - £90000 per annum + benefits: Ampersand Consulting LLP: Markit EDM (CA...

Day In a Page

In a world of Saudi bullying, right-wing Israeli ministers and the twilight of Obama, Iran is looking like a possible policeman of the Gulf

Iran is shifting from pariah to possible future policeman of the Gulf

Robert Fisk on our crisis with Iran
The young are the new poor: A third of young people pushed into poverty

The young are the new poor

Sharp increase in the number of under-25s living in poverty
Greens on the march: ‘We could be on the edge of something very big’

Greens on the march

‘We could be on the edge of something very big’
Revealed: the case against Bill Cosby - through the stories of his accusers

Revealed: the case against Bill Cosby

Through the stories of his accusers
Why are words like 'mongol' and 'mongoloid' still bandied about as insults?

The Meaning of Mongol

Why are the words 'mongol' and 'mongoloid' still bandied about as insults?
Mau Mau uprising: Kenyans still waiting for justice join class action over Britain's role in the emergency

Kenyans still waiting for justice over Mau Mau uprising

Thousands join class action over Britain's role in the emergency
Isis in Iraq: The trauma of the last six months has overwhelmed the remaining Christians in the country

The last Christians in Iraq

After 2,000 years, a community will try anything – including pretending to convert to Islam – to avoid losing everything, says Patrick Cockburn
Black Friday: Helpful discounts for Christmas shoppers, or cynical marketing by desperate retailers?

Helpful discounts for Christmas shoppers, or cynical marketing by desperate retailers?

Britain braced for Black Friday
Bill Cosby's persona goes from America's dad to date-rape drugs

From America's dad to date-rape drugs

Stories of Bill Cosby's alleged sexual assaults may have circulated widely in Hollywood, but they came as a shock to fans, says Rupert Cornwell
Clare Balding: 'Women's sport is kicking off at last'

Clare Balding: 'Women's sport is kicking off at last'

As fans flock to see England women's Wembley debut against Germany, the TV presenter on an exciting 'sea change'
Oh come, all ye multi-faithful: The Christmas jumper is in fashion, but should you wear your religion on your sleeve?

Oh come, all ye multi-faithful

The Christmas jumper is in fashion, but should you wear your religion on your sleeve?
Dr Charles Heatley: The GP off to do battle in the war against Ebola

The GP off to do battle in the war against Ebola

Dr Charles Heatley on joining the NHS volunteers' team bound for Sierra Leone
Flogging vlogging: First video bloggers conquered YouTube. Now they want us to buy their books

Flogging vlogging

First video bloggers conquered YouTube. Now they want us to buy their books
Saturday Night Live vs The Daily Show: US channels wage comedy star wars

Saturday Night Live vs The Daily Show

US channels wage comedy star wars
When is a wine made in Piedmont not a Piemonte wine? When EU rules make Italian vineyards invisible

When is a wine made in Piedmont not a Piemonte wine?

When EU rules make Italian vineyards invisible