Rising inflation could be pushing Brits towards Aldi and Lidl, with 62% of the population shopping in an Aldi or Lidl over the 12 weeks ending 21 May.
According to Kantar Worldpanel, the German discounters grew at their fastest rate since January 2015, with combined sales rising 19.2% and the pair reaching a record market share of 12%. To put this into perspective, the big four’s collective sales grew by just 1.6% over the same period.
Aldi and Lidl’s growth has coincided with rising food inflation. It currently stands at 2.9% – meaning Brits spent an additional £27 on food over the past 12 weeks. Chris Hayward, consumer specialist at Kantar Worldpanel, admits the growth of the discounters is coming at a time when Brits are starting to “feel the pinch”.
He says: “That £27 may not seem like much, but if inflation continues at its current rate over the course of a year that would mean an extra £119 spent on groceries per household.
“The fact is 62% of the UK population shopped in an Aldi or Lidl during the past 12 weeks, compared to just 58% this time last year – that’s an additional 1.1 million households visiting either of these stores.”
Over the 12-week period, sales of own-label products grew by 6%. This was in sharp contrast to branded products, which saw sales growth of just 0.6%.
This appears to back up a recent study by IRI, which showed a slowdown in new branded product launches. It claimed sales from branded new products were down by 6.5% over the last year, which equated to losses in revenue from new product development of £99.6m.
The rise in own-label products has been driven by major supermarkets such as Tesco cutting down on their product ranges in a bid to create simpler supply chains and cut costs amid the falling value of the pound. This has made new branded food and drink product launches seem like a riskier move.
All the big four supermarkets grew their market share over this latest period, with Morrisons the standout performer as it celebrates six consecutive periods of sales growth.
Its premium own-label range ‘The Best’ has been key, according to Kantar Worldpanel, with nearly 800,000 additional shoppers choosing products from the range over the past 12 weeks.
And despite its continuing quarterly sales decline, Asda was also boosted by own-label. More than 9.2 million households bought Asda value own label products during the past 12 weeks; one million more than last year.