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Grocery market share for discounters hits record 12%

Published:  07 March, 2017

The march of the discounters continues as £1 in every £8 spent on groceries is now spent in either Aldi or Lidl.

According to monthly retail data from Nielsen, their combined market share of the grocery market has now reached 12%, helped by new stores opening and higher basket spend thanks to the rising quality of their products.

Despite low cost being their original USP, Aldi and Lidl have been playing up the quality message in their stores.

This is especially true of Aldi, which launched a 'fine wine' range last month - a week after it was revealed that it had bumped the Co-op out of the way to become the UK's fifth largest supermarket (Kantar).

"Whilst the retail landscape is very different to 25 years ago when Aldi entered the UK, discounter market share is higher than when Kwik Save was at its pomp as the original discounter," Mike Watkins, Nielsen's UK head of retailer and business insight, observed.

"The difference today is that Aldi and Lidl aren't solely associated with low-priced brands, having been very astute at promoting the quality and price of their private-label range to appeal to a wider array of shoppers."

During the twelve weeks ending 25 February 2017, Aldi's sales grew 12% year-on-year, and Lidl's 9.1%, while across the overall market sales increased 2.2%.

Thus, Aldi and Lidl's combined market share crossed 12% for the first time, to 12.3% or nearly £1 in every £8 spent on groceries.

Aside from the discounters, Iceland had the biggest rise in year-on-year sales (+5.6%), while Morrisons had the strongest rise among the big four supermarkets (+1.9%).

The supermarkets were also given a boost last month by inflation returning to food retailing (+0.4%) for the first time since April 2016.

For the four weeks to February 27, takings at the tills rose +1.1%. 

Inflation has two impacts on how people shop: consumers become more careful about how much they spend and more promisicous with the stores they visit - both of which spells good news for for the discounters, which have become the go-to place for low cost alternatives.