Aldi has reported its “best ever” festive sales result for December, as the grocer claims to have won over more than half a million new customers from the ‘big four’ supermarkets Tesco, Sainsburys, Asda and Morrisons.
The retailer’s sales over the month rose 0.4% compared to the same period in 2020, a year in which grocery spending was unusually high due to the country being under national lockdown and bars and restaurants kept closed.
According to Kantar, Aldi was the only major supermarket to grow sales in December. Its sales were also up 8.1% on 2019.
The discounter’s strong performance follows the crowning of its Christmas advert as the most effective festive ad of the year, pipping Coca-Cola, Lidl, and M&S to the post.
Research by Kantar last year analysing the effectiveness of 2021’s crop of Christmas spots found Aldi’s reimagining of Charles Dickens’s A Christmas Carol, featuring stalwart brand character Kevin the Carrot and new face Ebanana Scrooge, was the ad most likely to deliver on long- and short-term measures over the season.
Similar research by effectiveness company System 1 drew the same conclusion, with Aldi’s ad achieving a star rating of 5.4 out of a possible 5.9. Sky Cinema and Morrisons followed, with scores of 4.9 and 4.7, respectively.Aldi crowned this year’s most effective Christmas ad
“Kevin the Carrot reminded Britain last year that you do not need to be extravagant to be kind, just as you do not need to spend a lot to indulge your family with a little luxury at Christmas,” says Aldi’s UK CEO Giles Hurley.
According to Hurley, Aldi’s premium ‘Specially Selected’ range had a particularly successful month, notching up its highest ever sales as the supermarket saw strong demand for alcoholic products within the range.
“As we look ahead, the top priority for most families this year will be managing their household budgets in the face of rising living costs. As the cheapest supermarket in Britain, Aldi will always offer the lowest prices for groceries, no matter what, and continue to support our British farmers and producers,” Hurley adds.
The festive period also saw Aldi continue to grow its Christmas Food campaign, donating 1.8 million meals to local charities, food banks and community groups through its partnership with Neighbourly.
Kantar data for the 12 weeks to 26 December saw overall take-home grocery sales decline by 3% compared with the same period in 2020, when lockdown drove unusually high spend. Sales were 8% stronger than in 2019, however.
While every major grocer increased sales over the 12 weeks compared to 2019, Aldi and Ocado were the only two to avoid a drop versus 2020. Aldi held steady with total till sales of £2.43m, an increase of 6.3% on a two-year basis.
At the same time, Aldi grew its market share from 7.4% in 2020 to 7.7% in 2021. Tesco, Sainsbury’s, Asda and Morrisons continue to claim the largest shares in the market, however, with Aldi’s closest rival, Morrisons, claiming 10.1%.
Tesco and Sainsbury’s aggressive price match offer have allowed them to compete with Aldi on hundreds of products… Aldi must look to continue to refresh its range if it is to continue growing its market share in the UK.
Kunaal Shah, GlobalData
However, Kunaal Shah, associate retail analyst at GlobalData, has deemed Aldi’s Christmas performance “disappointing” in light of the supermarket’s aggressive store opening program, anticipating that like-for-like growth will be in negative territory. Last year Aldi announced plans to open 100 new stores over the next two years, as part of a £1.3bn investment which will also create new distribution centres and 2,000 jobs.
According to Shah, the discounter has been held back by its “poor online proposition”, which he believes will hinder its future growth plans as consumers increasingly buy online.
He says: “Aldi’s low-price, store-first proposition means offering home delivery is not a priority at the moment, however it should explore this offer to truly compete with the top four. Consumers can order online via click and collect from around 200 stores, or through Deliveroo from over 130 stores (of its total 930 branches) but Aldi must consider rolling these options out to reach more consumers across the country, particularly as its competitors begin to expand rapid-delivery initiatives.”
The growth in Aldi’s Specially Selected range does reflect the broad appeal of its high quality and affordable range of products, particularly as UK shoppers face rising living costs in 2022, Shah adds.
“However, Tesco and Sainsbury’s aggressive price match offer have allowed them to compete with Aldi on hundreds of products, and Aldi must look to continue to refresh its range if it is to continue growing its market share in the UK,” he says.