Subscriber login Close [x]
remember me
You are not logged in.

Millennials behind Aldi and Lidl's growth as the fastest growing spenders on grocery shopping

Published:  28 October, 2016

Millennial-led households are the fastest growing spenders on grocery shopping and are driving the growth of the discounters, according to new data.

Millennial-led households are the fastest growing spenders on grocery shopping and are driving the growth of the discounters, according to new data.

Spend among households where a millennial (aged 16-35) is the main shopper grew 7.9% - far ahead of the next fastest-growing group, which is households led by people aged 65+ (up 3%).

While overall grocery spend in Britain is up 2.7% year-on-year, millennials' spend on grocery shopping is rising three times faster than that of the overall population according to data from Nielsen Homescan.

The average millennial household with children now spends an extra £210 annually on groceries, while millennial households without children spend £113 extra.

"Millennials are freeing up more income to spend on groceries," Mike Watkins, Nielsen's UK head of retailer and business insight said.

"This is mainly due to millennials shopping more frequently and continuing to buy more per trip. This is down to the increasing number of local store formats which suit their 'top-up' lifestyle - and can include spending more on food consumed outside the home - much more than the big weekly trip to a large out-of-town store."

Historically, Asda has had the strongest appeal with millennials, but 16 to 35 year-olds are increasingly switching to the discounters and bargain stores.

Millennial spend at Aldi has increased 46% year-on-year - compared to 19% across all other Aldi age groups.

Millennial spend at Lidl rose 28% - nearly twice the rate of all other shoppers (15%).

"Although millennials, particularly families, have historically over-indexed on shopping at Asda, they're now really driving the growth of the discounters," Watkins explained.

"However, it's important not to think of millennials as one homogenous group. For example, they've also increased spend dramatically at M&S which has a large price difference to the discounters due a different product assortment."

Aldi has been doing better at targeting millenials in the north, where there is a higher portion of millenials among the population.

Watkins said retailers tend to picture of millennials as "London-based hipsters shopping at wholefoods", but explained that they're driving growth at Asda and the discounters and have an overly strong presence in the north.

He added: "Retailers need to look beyond labels and understand actual behaviour if they want to appeal to this crucial group more successfully."

Due to the sheer size of the city, London has the most millennials, but the north of England has the highest proportion of millennials.

Aldi has been much more successful at gaining the millennial pound in the north - particularly in Yorkshire where there are more than twice as many millennial households than in other parts of Britain.

However, Aldi under-performs in London compared to Lidl due to having far fewer stores in millennial catchment areas.

Despite Lidl's better performance in London, its overall success is also being driven by regions less populated with millennials, such as Wales and the South West.