German discounters Aldi and Lidl have continued their assault on Britain’s big supermarket operators as the battle to win over cash-strapped consumers heats up.
New industry data released yesterday also show Aldi increasing its market share to within a whisker of upmarket grocer Waitrose, itself a beneficiary of the squeeze on the middle ground.
Overall market growth for the 12 weeks to 20 July slipped to just 0.9 per cent, however – the lowest figure for a decade, according to researchers at Kantar Worldpanel, as consumers shop around for cut-price deals.
Tesco and Morrisons are being particularly hurt by the rise of the German hard discounters, responding by cutting prices and investing in online operations.
The Kantar figures show Tesco’s sales fell 3.8 per cent year-on-year in the latest 12-week period, with its market share dipping to 28.9 per cent from 30.3 per cent. The fall was worse than the 1.9 per cent decline reported last month.
Last week, Britain’s biggest retailer ditched chief executive Philip Clarke and issued its second profit warning in two years, saying sales in the first half of the year were “somewhat below expectations”.
Number four player Morrisons, which like Tesco is undergoing a turnaround plan to improve its fortunes, also saw its sales slide by 3.8 per cent, year-on-year, in the 12-week period, with its market share down from 11.5 per cent to 11 per cent.
Sales at Aldi leapt 32.2 per cent in the period, taking its market share to 4.8 per cent, close to Waitrose on 4.9 per cent. Lidl, which said yesterday it was investing £14 million opening and upgrading stores in Edinburgh and the Lothians, recorded sales growth of 19.5 per cent and saw its market share rise from 3.1 per cent to 3.6 per cent.
Wal-Mart-owned Asda and Sainsbury’s both held onto their market share and recorded modest sales growth of 0.9 per cent and 1.2 per cent respectively.
Edward Garner, director at Kantar Worldpanel, said: “Aldi’s growth rate has lifted its market share to 4.8 per cent; this is a new record for the retailer and means it has nearly caught up with Waitrose. Similarly, Lidl sales have grown by nearly 20 per cent and it has held onto its record share.
“Waitrose has continued to resist pressure from the competition, testament to its policy of maximum differentiation, and has grown sales by 3.4 per cent. This figure is well above the market average and thereby has lifted its market share.”
The figures came as Morrisons confirmed it had appointed Tesco veteran Andrew Higginson, left, as its next chairman as under-pressure chief executive Dalton Philips battles sliding sales.
Analysts welcomed the appointment of Higginson, who will take up his position on 1 October.