For the 12 weeks to 3 January, Lidl became the UK’s fastest growing grocer as its sales rose 18.5%. In particular, its premium Deluxe range was credited as average basket sizes grew 7% to £17.20 over the festive period.
And discount rival Aldi was not too far behind, with its own sales up 13.3%.
Just a year ago, the German discounters had a combined market share of 8.3%, but this rose to 9.7% for the festive period in 2015.
Lidl says it is “extremely proud” to be the fastest growing British grocery retailer, with 2015 marking its most successful Christmas trading period yet. It claims sales growth was higher in 2015 than the previous year, with festive sales topping £1.1bn, an increase of 18.4%, and customer transactions up to 24 million.
“[These figures] show that our ‘best quality for the best price’ offering is enormously valued by the British customer.”
Ronny Gottschlich, UK CEO, Lidl
“It’s very encouraging for us and is testament to the hard work of all our employees who continue to make everything possible,” says
However, despite their festive success, growth has still slowed with Aldi and Lidl having previously hit a combined 10% share before Christmas.
It is also worth noting the impact of the German discounters’ aggressive expansion strategies, with both continuing to open stores while the big four are closing. Morrisons announced plans this morning (12 January) to shut seven more stores.
It also posted better than expected results – with sales at stores open for more than a year (as opposed to total sales as measured by Kantar Worldpanel) up 0.2%. Analysts had been expecting at least a 2% fall and it ends a run of nearly four years of festive sales declines.
Tesco and Sainsbury’s are set to reveal their results later this week. And despite slowdowns, Kantar Worldpanel’s head of retail insight Fraser McKevitt says it is important to remember that most people still shop at one of the ‘big four’.
“Despite Aldi and Lidl’s success, consumers are still spending most of their money in more traditional supermarkets, particularly in December,” explains McKevitt.
“But the discounters are still continuing to establish themselves in the minds of British consumers – almost one in eight did their single biggest December shopping trip in Aldi or Lidl, on top of the 15.6 million households who visited at some point in the 12 weeks. That is an increase of nearly one million shoppers on last year.”
Hit and miss performances
Of the big four supermarkets, Sainsbury’s was the biggest winner with its sales up 0.8% and market share increasing 0.1 points to 17%. Waitrose also benefitted from shoppers trading up over the Christmas period, as it grew sales by 1.5% and took its market share back up to 5.2%.
However, things weren’t as rosy for the rest of the market. The overall British grocery market saw sales fall by 0.2% year-on-year, largely thanks to continuing price deflation.
Tesco saw sales fall by 2.7%, with its market share falling 0.8 points year-on-year to 28.3%.
Asda, meanwhile, saw sales fall at a sharp rate of -3.5% with its market share now standing at 16.2%. Morrisons now has a market share of 11%, according to the Kantar Worldpanel data, although a fall was expected after it closed unprofitable stores over the period.
Iceland’s recent marketing emphasis on ‘The Power of Frozen’ also had little impact over Christmas. Its sales fell at an alarming rate of 4.1%.
McKevitt says shoppers made fewer trips to grocers this year.
He highlights that Brits spent 2.2% less on a typical Christmas dinner as poultry and veg were heavily promoted by the likes of Tesco with its ‘festive five’ promotion. However, alcohol sales increased thanks to a surge in popularity for sparkling wines including Champagne and Prosecco, which increased in value by 11%.
McKevitt concludes: “Shoppers reaped the benefit of falling prices this Christmas, with groceries 1.8% cheaper than last year.
“Wednesday 23 December was the single biggest shopping day of the year, but the anticipated uplift from an extra day in the week before Christmas didn’t help the supermarkets overall. Consumers simply delayed their shopping trips later this year, rather than making any extra trips.”