Aldi and Lidl see slowest growth in five years as Tesco turnaround gathers pace

Both discount retailers are growing at their slowest rate since 2011, though still significantly faster than the overall market.

grocery sales

Aldi and Lidl’s sales grew at their slowest rate for five years over the past three months as Tesco’s sales improve, driven by its cheaper own brand ‘Farm Brands’ range.

According to the latest figures from Kantar Worldpanel, Lidl’s sales increased by 6.1% in the 12 weeks ending 6 November, much slower than in recent months. Aldi’s sales also dipped to 10.2%, though both the discounters’ sales are still rising at a significantly faster rate than the overall market.

And despite the slowdown, Aldi and Lidl are attracting new shoppers, which Kantar Worldpanel says is “vital” to any supermarket’s growth. Helped by new store openings, Aldi alone attracted 547,000 more shoppers over the 12-week period, a bigger increase than at any other grocer.

grocery sales kantar worldpanel november

Nevertheless, the slowdown will be welcomed by the big four supermarkets, which initially struggled to temper their growth. Both Aldi and Lidl have effectively used marketing to get across the message they offer both low prices and quality, a message rivals found difficult to beat.

Tesco is benefitting most, with its sales up 2.2% in the period. Branded sales were up but it is its own brand that helped boost the grocer, both at the premium and cheaper ends of the market.

In particular Tesco’s growth was boosted by affluent shoppers, with average spend per trip up by 2.1% to £20.69. Its growth was also ahead of the overall market, where sales were up by 0.8%, though prices are still falling with goods still 0.5% cheaper than last year on a like-for-like basis.

Kantar Worldpanel expects to see prices creep up again unless retailers “unleash” a new round of price cuts. And although this is in part down to the EU referendum, which has affected the value of sterling, deflation has been easing since before then.

Elsewhere, Sainsbury’s, Morrisons and Asda all saw sales decline while Iceland grew by an impressive 8.3% as it steadily moves its offering upmarket through tie-ins with brands such as Slimming World and Pizza Express and store openings in locations such as Clapham in London.

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  • Nathan Levi 16 Nov 2016 at 4:02 pm

    Iceland has been open in Clapham ever since I’ve lived there, which is 7 years.

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