Lidl continues to up ad spend as Tesco takes a more cautious approach

Lidl upped its spend on TV and press advertising by 160% to £5.9m, over the four weeks ending 28 March [Nielsen], as it unveiled its first link up with celebrity chef Kevin Love and the latest Lidl Surprises ad to promote its Easter range.

Lidl surprises ad

The German discounter, which has spoken openly about its plans to appeal to middle class shoppers over recent months, was followed in spend by Asda (£4m) and Aldi (£3.5m), despite both dropping their investments by respective rates of -26% and -4% over the same period last year.

Other big spenders in the run up to Easter included Iceland, which upped ad spend by 526% to £2.4m thanks to its new premium-leaning Peter Andre adverts.

Tesco, the fifth biggest spender, dropped its investment the most significantly. New boss Dave Lewis’ cautious approach saw ad spend fall by 138% to £3.1m.

Following a series of PR disasters, Tesco has been reshaping its marketing department recently, with Sherry Cramond, brand marketing director, and David Wood, managing director for health and wellbeing, leaving the supermarket, and it hiring BBH as its new chief ad agency at the turn of the year.

Nielsen’s UK head of retailer insight Mike Watkins believes the growing marketing investments of the German discounters is hurting the bigger supermarkets.

“Aldi and Lidl have become the fifth and seventh biggest supermarkets partly due to their large on-going investment in advertising,” he said.

“Not only do they consistently spend the most in relation to each percentage of market share they hold, their advertising has also changed the perceptions and expectations of UK shoppers.”

Although Kantar’s respective data recently suggested that Aldi has now grown to sixth in terms of the UK’s biggest supermarkets, it is fifth biggest according to Nielsen, with a market share of 6.2%.

Lidl, meanwhile, is seventh biggest, ahead of Waitrose, with a market share of 4.9%.

March saw the first annual rise in shopper spending at UK supermarkets for a year, with the value sales up 0.7% year-on-year, according to Nielsen’s data for the four weeks ending 28 March.

But this wasn’t enough to refresh flagging sales at the big four, with Nielsen reporting a sales decline at each, with Asda at -1.7% and Tesco at -1.1%, the worst two performers.

“Consumer spend continues to be impacted by a combination of record-low food inflation and supermarkets’ competitive pricing policies – good news for shoppers but not for retailers, whose margins are continuously under pressure,” added Watkins.