Aldi and Lidl accelerate assault on big supermarkets, Kantar data shows

Overall sales among the grocery market were up 3.2% in the 12 weeks to 7 October compared to the same 12 weeks last year, according to data collected by Kantar Worldpanel.

The industry's growth was down from the 3.5% and 3.6% seen in recent reports but represented the fourth period in a row where sales topped 3.0% and well ahead of the average market growth rate over the past five years, 1.7%. The price inflation evident since the start of the year has been a key ingredient, standing at 2.0% in the latest 12-week period.

Discounter Aldi generated the fastest sales growth in period, up 15.1% and with its growing number of stores contributing to its market share increasing by 0.8 percentage points to 7.6%. This is the fastest rate of growth Aldi has enjoyed since January.

Fellow German-owned chain Lidl grew sales 10%, with 5% more shoppers through its doors compared to the same period last year and visitors spending an extra 55 pence per trip – a greater increase than any of its rivals. Its market share was up 0.4ppts to 5.6%.

Not far behind at 7.0%, Co-op was the only other bricks and mortar retailer to gain market share, up to 6.4% from 6.2% as an extra 265,000 households visiting a store over the past 12 weeks.

Morrisons managed to hold onto its 10.3% market share as it grew sales 2.4% as it sold more branded items and cutting back fast on its sector-leading level of promotion, with around 45% of products sold under various deals.

Fellow Yorkshire-based group Asda matched this rate of growth, with its market share dipping to 15.3% from 15.5%.

Sainsbury's was again the slowest growing of the big four, at 0.6% with its market share down 0.4ppts to 15.4% compared to last year.

Market leader Tesco lost 0.6ppts to 27.4% as sales grew 0.9%.

“Despite widespread interest in the September launch of its discounter concept, Jack’s, the small number of stores planned means it won’t impact on Tesco’s market share without a significant expansion," said Fraser McKevitt, Kantar's head of retail and consumer insight.

"Within the main supermarket ‘Exclusively at Tesco’ lines continue to be a real bright spot, with 41% of British shoppers buying one of these products during the last 12 weeks, spending a combined £102m.”

Online specialist Ocado saw its till roll swell 7.5%, helped by its latest robot-operated warehouse opening in south-east London to help add 0.1ppt to take its market share to 1.2%.

Kantar noted that the festive spirit was already apparent, with 8% of households buying mince pies last month, spending a total of £4m with 70 days still to go before Christmas.

The data suggests an interesting shift in the battle of the supermarkets, said Russ Mould at AJ Bell, as supermarkets face the challenge of trying to drive up sales volumes without diluting profit margins too much through price cuts and promotions.

“We’re now heading into the all-important Christmas period where supermarkets go all out to try to get one up on the competition with big offers and new products. As such, Tesco’s board may not be best pleased with its momentum going into the seasonal push.

“The latest 12 week figures show a 0.6% percentage point decline in Tesco’s market share to 27.4% and only a 0.9% rise in sales. The result is somewhat surprising given how much publicity Tesco generated with its Jack’s discount concept launch in late-September."

He said Sainsbury's slow growth was less surprising. "The business has been having major issues with stock availability in its stores with countless pictures on social media showing empty shelves, meaning shoppers visiting its stores weren’t able to buy everything they wanted. That’s an awful situation given the wealth of competitors who would be happy to cater for these shoppers."

Ahead of Sainsbury's financial results on 8 November, Mould said shareholders and customers are going to want answers as to why so many shelves are bare.