Inflation helps Aldi and Lidl take record market share

[Sancho Panza]

Marketing Week 31/1/17

'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.'

 

 

Big branded food producers must be having a tough time.

Edited June 1, 2017 by Sancho Panza

[TheCountOfNowhere]

No Surprise to me.

We've switched to Lidl ( not so keen on Aldi ) and find most of it's stuff to be as good as or better than Tesco and 1/3 cheaper.

The establishment forced up prices 10%, so I switched and my spending dropped 10%

F**k em

[Barnsey]

Over staffed Tesco's and Sainsbury's competing with efficiently staffed Lidl's and Aldi's, rapid momentum of lay offs to come methinks. I see more 66 plate Mercs in the Aldi car park than I do in the Waitrose one these days, what a bizarre time we live in right now.

Edited June 1, 2017 by Barnsey

[TheCountOfNowhere]

Just now, Barnsey said:

Over staffed Tesco's and Sainsbury's competing with efficiently staffed Lidl's and Aldi's, rapid momentum of lay offs to come methinks.

Lidls checkout staff do what they do in Spain, put all the stuff through asap, they dont hang about for an old bag to put stuff in her old bag.

 

[Barnsey]

Just now, TheCountOfNowhere said:

Lidls checkout staff do what they do in Spain, put all the stuff through asap, they dont hang about for an old bag to put stuff in her old bag.

 

Apparently they get a bonus based on how fast they are? Last time I went to Aldi I almost came out on a stretcher after having packets of frozen meat being launched at me at the checkout

[Freki]

I found comfort in Lidl, I lived in a poor country for 3 years, and nothing much on the shelves.

Here at Sainsbury's it is not enough to know what you want to buy, you need to pick a brand. In Lidl one brand per product, easy. And products are of quality. But I know I am a marginal segment of the population for citing this as my main reason.

[TheCountOfNowhere]

26 minutes ago, Barnsey said:

Apparently they get a bonus based on how fast they are? Last time I went to Aldi I almost came out on a stretcher after having packets of frozen meat being launched at me at the checkout

Aldi near me didnt open on Boxing Day.  Tesco did.

 

I know who I would rather work for

[TheCountOfNowhere]

2 minutes ago, Freki said:

I found comfort in Lidl, I lived in a poor country for 3 years, and nothing much on the shelves.

Here at Sainsbury's it is not enough to know what you want to buy, you need to pick a brand. In Lidl one brand per product, easy. And products are of quality. But I know I am a marginal segment of the population for citing this as my main reason.

No, I think a lot of people are with you on this. 

Been a few programs on TV last 2 years that have made people think about their buying habits.

I'm a bit Lidl convert for sure.  Aldi is s*8t for some reason tho.

[Ash4781]

Walmart has released Asda financial numbers and they are really dire. I still feel Amazon will enter this market at some point. It's hard to know whether Walmart has the stomach to turn Asda around! 

[council dweller]

Good to see Aldi and Lidl running neck and neck.....this will keep them (the Germans) price competitive, possibly for a few years at least.

I still manage to keep my spending at Aldi down to 10 or 12 quid a week.

BTW. look out for fruit bushes @ £1.79 this Thursday .

[Noallegiance]

On 01/06/2017 at 3:21 PM, Barnsey said:

I see more 66 plate Mercs in the Aldi car park than I do in the Waitrose one these days, what a bizarre time we live in right now.

This makes me laugh every time.

£350+ per month on a motor, weekly shop at a budget food outlet.

They need bigger sites, though. Getting parked at most times of day is a Weston.

[ThePrufeshanul]

LOL - it's no surprise that people who are canny with their money can afford to drive around in expensive German cars

[Funn3r]

On 01/06/2017 at 8:53 AM, Sancho Panza said:

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

What this means in practice is a store full of irate shoppers who cannot find their favourite thing any more. I have always liked Tesco Everyday Value (own-brand) toothpaste 22p for very nice tasting tube. Also their canned cherry tomatoes. Both now gone - along with me since Sainsbury still sells said tomatoes.

[durhamborn]

Iv got every supermarket within 1 mile apart from Waitrose.I do like Lidl and at 9.30am you get lots of things with 30% off.Their  meat offers that week are very good value and that extra 30% makes it even better.They cant compete with Tesco for me though on price.7.30pm and i usually get £50 worth of food for a tenner.Im fully stocked so now only go when its lashing down with rain.You always get piles of quality stuff then as its empty.

I might have to get freezer number 3 from Gumtree though i dont like paying the electric.Roll on the days we can do a windmill with a battery for storage to run them off 

[sideysid]

I've shopped in Lidl from when they first opened up here, even Netto back in the days (but there stock levels were haphazard and shop floors were always messy).

The no.1 thing that drives me away from the big chains is the ridiculous offers. I just want to buy a one of something at a decent price whenever I go shopping. It annoys me when the likes of Tesco up the price for a pack of cheese for a 3-for-2 offer or puts it up to £5 one week so they can half price it the next.

If Lidl/Aldi had floated on the stock market, I would have bought shares a long time ago. The cost of living keeps going up, quality products, haven't got the overheads and pension obligations of the others, more efficiently run, they could take the no.1 spot in the near future.

[winkie]

Lidl and Aldi in France and Spain not been to them in Germany but imagine the same.....are far superior in number of products and quality of products, the stores not only as good but IMO far better than the stores here.....anybody care to agree or disagree......is it something to do with supply chain or the value of the pound?

 

 

Edit to say: Can these stores reinvest, improve and keep prices low so that both staff and customers gain because they don't have shareholders to pay....I hope they stay as they are so we can all benefit and not sell out to the big corporates.....lose,lose.

Edited August 2, 2017 by winkie

[TheCountOfNowhere]

Loving Lidl, not so sure about Aldi

When some of their products are 50% tesco/Sainsburys and same quality...what to the Big supermarkets expect is going to happen.

 

Best thing Mr Tesco can do is open up Tesco Basic, based on the same business model and undercut them.

If the chief exec of tesco is reading this then I'm copyrighting this idea and consider Tesco Basic trademarked as of now  

 

Edited August 2, 2017 by TheCountOfNowhere

[Locke]

Is it just me or does the author not understand the terms he is throwing around?

The market share of the big 4 has declined. In fact, all supermarkets lost market share to Lidl and Aldi.

The sales of the big 4 increased, but at below-inflation rates, which should be horrifying information to them.

[honkydonkey]

19 minutes ago, winkie said:

Lidl and Aldi in France and Spain not been to them in Germany but imagine the same.....are far superior in number of products and quality of products, the stores not only as good but IMO far better than the stores here.....anybody care to agree or disagree......is it something to do with supply chain or the value of the pound?

 

 

Edit to say: Can these stores reinvest, improve and keep prices low so that both staff and customers gain because they don't have shareholders to pay....I hope they stay as they are so we can all benefit and not sell out to the big corporates.....lose,lose.

All stores in France are better because their food is better. I've been to Aldi&Lidl in every country in Europe practically and they're 80% the same as each other, layout same, the only food that differs is milk brands, vegetables, booze and a few odds and sods.

In Germany Aldi sell lots of nuts and snacks from the US chain 'Trader Joe's'. I didn't realise at the time but Aldi own them,

In Slovenia Aldi is called Hofer for some reason.

We don't want to end up like Germany though where there are few supermarkets other than A&L and that does limit choice somewhat.

Edited August 2, 2017 by honkydonkey

[winkie]

I have said this before and will say it again......we all have noticed shrinkage big time in all the stores.....many people are not interested in big names as long as the quality is good. Fed up with all the wasted packaging and plastics food stuff comes wrapped in. Don't care if a healthy cucumber is straight or curved.

 

Why can't we have a supermarket that sells quality products by the kilo and litre......bring your own container or bags......I would be very happy to purchase washing liquid, shampoo etc to rice, flour, marmalade, oats, biscuits etc by weight not fancy small plastic branded containers, in plastic trays, wrapped in cellophane.....also why can't we buy compact toilet rolls here, heavy, long and strong instead of the airy fairy rolls that are super expensive large holed rolled rubbish?

Edited August 2, 2017 by winkie

[TheCountOfNowhere]

6 minutes ago, winkie said:

I have said this before and will say it again......we all have noticed shrinkage big time in all the stores.....many people are not interested in big names as long as the quality is good. Fed up with all the wasted packaging and plastics food stuff comes wrapped in. Don't care if a healthy cucumber is straight or curved.

 

Why can't we have a supermarket that sells quality products by the kilo and litre......bring your own container or bags......I would be very happy to purchase washing liquid, shampoo etc to rice, flour, marmalade, oats, biscuits etc by weight not fancy small plastic branded containers, in plastic trays, wrapped in cellophane.....also why can't we buy compact toilet rolls here, heavy, long and strong instead of the airy fairy rolls that are super expensive large holed rolled rubbish?

Visit Tesco Basic, bring your own pot.  

Are you an Ex-BTLer with no pot to p*ss in, then get one free.

 

IIRC, Iceland started a bit like that, you could scoop out as many chips as you liked from a big freezer and buy what you needed.

 

 

[TheCountOfNowhere]

There you go

 

http://about.iceland.co.uk/about-iceland/the-iceland-story/

 

Early Days

1970 Iceland sprang to life when Malcolm Walker and another bored, young retailer decided to open a shop in an attempt to make their fortunes. They raised initial capital of just £60 to pay one month’s rent and opened the very first Iceland in Oswestry, Shropshire in November 1970. In those days, before domestic fridges and freezers became commonplace, Iceland specialised in selling loose frozen food.

[winkie]

5 minutes ago, honkydonkey said:

All stores in France are better because their food is better. I've been to Aldi&Lidl in every country in Europe practically and they're 80% the same as each other, layout same, the only food that differs is milk brands, vegetables, booze and a few odds and sods.

In Germany Aldi sell lots of nuts and snacks from the US chain 'Trader Joe's'. I didn't realise at the time but Aldi own them,

In Slovenia Aldi is called Hofer for some reason.

We don't want to end up like Germany though where there are few supermarkets other than A&L and that does limit choice somewhat.

We have french food and spanish all sorts of food in the stores here.....there is auchan, carrefour, mercadona, dia, e leclerc......plenty of choice......so why are is the food in our supermarkets not as good as the food you can buy on the continent....is it because we put up with it?

[honkydonkey]

1 minute ago, winkie said:

We have french food and spanish all sorts of food in the stores here.....there is auchan, carrefour, mercadona, dia, e leclerc......plenty of choice......so why are is the food in our supermarkets not as good as the food you can buy on the continent....is it because we put up with it?

I think supermarkets here decide what we want based upon our habits. For instance, our fruit and vegetables are far more uniform because that's 'what our customers want'. I think either the supermarkets are wrong, or we're a nation of morons. Both of these opinions are likely true.

Look at peoples trolleys in this country, loaded up with crap like Americans would do at Walmart. Then look at shopping trolleys on the continent. We have crap food because people eat crap food.

[winkie]

1 minute ago, TheCountOfNowhere said:

Visit Tesco Basic, bring your own pot.  

Are you an Ex-BTLer with no pot to p*ss in, then get one free.

 

IIRC, Iceland started a bit like that, you could scoop out as many chips as you liked from a big freezer and buy what you needed.

 

 

That is the thing it does not have to be basic.....it would have to be quality for less, all information would have to be stated as is now, a label you could stick on your own container......fed up with growing numbers of miniature sized packets....more plastic and packaging than the food/ toiletries within.