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."

News
scienceExcitement from alien hunters at 'evidence' of extraterrestrial life
Life and Style
Customers can get their caffeine fix on the move
food + drink
News
newsRyan Crighton goes in search of the capo dei capi
Extras
indybest

PROMOTED VIDEO
Arts and Entertainment
Actors front row from left, Jared Leto, Jennifer Lawrence, Meryl Streep, Ellen DeGeneres, Bradley Cooper, Peter Nyongío Jr., and, second row, from left, Channing Tatum, Julia Roberts, Kevin Spacey, Brad Pitt, Lupita Nyongío and Angelina Jolie as they pose for a
film
Sport
sport
Life and Style
techCould new invention save millions in healthcare bills?
Sport
David Moyes gets soaked
sport Moyes becomes latest manager to take part in the ALS challenge
Voices
A meteor streaks across the sky during the Perseid Meteor Shower at a wind farm near Bogdanci, south of Skopje, Macedonia, in the early hours of 13 August
voicesHagel and Dempsey were pure Hollywood. They only needed Tom Cruise, says Robert Fisk
News
peopleEnglishman managed quintessential Hollywood restaurant Chasen's
Life and Style
food + drinkHarrods launches gourmet food qualification for staff
Arts and Entertainment
Michael Flatley prepares to bid farewell to the West End stage
danceMichael Flatley hits West End for last time alongside Team GB World champion Alice Upcott
News
ebooksAn evocation of the conflict through the eyes of those who lived through it
Life and Style
Horst P Horst mid-fashion shoot in New York, 1949
fashionFar-reaching retrospective to celebrate Horst P Horst's six decades of creativity
News
Members and supporters of the lesbian, gay, bisexual, transgender (LGBT) community walk with a rainbow flag during a rally in July
i100
Life and Style
Black Ivory Coffee is made using beans plucked from elephants' waste after ingested by the animals
food + drinkFirm says it has created the "rarest" coffee in the world
Life and Style
news

As Voltaire once said, “Ice cream is exquisite. What a pity it isn’t illegal”

Life and Style
food + drinkThese simple recipes will have you refreshed within minutes
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

Network Engineer - CCNP, Hedge Fund, London

£50000 - £60000 per annum: Harrington Starr: Network Engineer - CCNP, Hedge Fu...

Senior Network Engineer-CCIE, Multicast, Low Latency

£60000 - £70000 per annum: Harrington Starr: Senior Network Engineer-CCIE, Mul...

Network Infrastructure Engineer

£30000 - £50000 per annum: Harrington Starr: Network Infrastructure Engineer (...

Network Engineer (CCNP, BGP, Multicast)

£35000 - £45000 per annum: Harrington Starr: Network Engineer (CCNP, BGP, Mult...

Day In a Page

All this talk of an ‘apocalyptic’ threat is simply childish

Robert Fisk: All this talk of an ‘apocalyptic’ threat is simply childish

Chuck Hagel and Martin Dempsey were pure Hollywood. They only needed Tom Cruise
Mafia Dons: is the Camorra in control of the Granite City?

Mafia Dons: is the Camorra in control of the Granite City?

So claims an EU report which points to the Italian Mob’s alleged grip on everything from public works to property
Emmys look set to overhaul the Oscars as Hollywood’s prize draw

Emmys look set to overhaul the Oscars as Hollywood’s prize draw

Once the poor relation, the awards show now has the top stars and boasts the best drama
What happens to African migrants once they land in Italy during the summer?

What happens to migrants once they land in Italy?

Memphis Barker follows their trail through southern Europe
French connection: After 1,300 years, there’s a bridge to Mont Saint-Michel

French connection: After 1,300 years, there’s a bridge to Mont Saint-Michel

The ugly causeway is being dismantled, an elegant connection erected in its place. So everyone’s happy, right?
Frank Mugisha: Uganda's most outspoken gay rights activist on changing people's attitudes, coming out, and the threat of being attacked

Frank Mugisha: 'Coming out was a gradual process '

Uganda's most outspoken gay rights activist on changing people's attitudes, coming out, and the threat of being attacked
Radio 1 to hire 'YouTube-famous' vloggers to broadcast online

Radio 1’s new top ten

The ‘vloggers’ signed up to find twentysomething audience
David Abraham: Big ideas for the small screen

David Abraham: Big ideas for the small screen

A blistering attack on US influence on British television has lifted the savvy head of Channel 4 out of the shadows
Florence Knight's perfect picnic: Make the most of summer's last Bank Holiday weekend

Florence Knight's perfect picnic

Polpetto's head chef shares her favourite recipes from Iced Earl Grey tea to baked peaches, mascarpone & brown sugar meringues...
Horst P Horst: The fashion photography genius who inspired Madonna comes to the V&A

Horst P Horst comes to the V&A

The London's museum has delved into its archives to stage a far-reaching retrospective celebrating the photographer's six decades of creativity
Mark Hix recipes: Try our chef's summery soups for a real seasonal refresher

Mark Hix's summery soups

Soup isn’t just about comforting broths and steaming hot bowls...
Tim Sherwood column: 'It started as a three-horse race but turned into the Grand National'

Tim Sherwood column

I would have taken the Crystal Palace job if I’d been offered it soon after my interview... but the whole process dragged on so I had to pull out
Eden Hazard: Young, gifted... not yet perfect

Eden Hazard: Young, gifted... not yet perfect

Eden Hazard admits he is still below the level of Ronaldo and Messi but, after a breakthrough season, is ready to thrill Chelsea’s fans
Tim Howard: I’m an old dog. I don’t get too excited

Tim Howard: I’m an old dog. I don’t get too excited

The Everton and US goalkeeper was such a star at the World Cup that the President phoned to congratulate him... not that he knows what the fuss is all about
Match of the Day at 50: Show reminds us that even the most revered BBC institution may have a finite lifespan – thanks to the opposition

Tom Peck on Match of the Day at 50

The show reminds us that even the most revered BBC institution may have a finite lifespan – thanks to the opposition