Aldi has replaced Morrisons as one of the UK grocery sector’s ‘big four’ supermarkets.
Market research company Kantar revealed today (13 September) the German discounter’s sales rose by 18.7% over the 12 weeks to 4 September, reaching a 9.3% market share and making Aldi the UK’s fourth largest supermarket for the first time. It sits behind Tesco, Asda and Sainsbury’s. Morrisons, now in fifth, holds a 9.1% market share.
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In further confirmation UK consumers are trading down to help them cope with a cost-of-living crisis, fellow German discounter Lidl saw its sales grow by 20.9% over the same period. Its market share has increased to 7.1%.
The shake-up in the UK grocery pecking order comes against a backdrop of accelerating inflation in the sector. Inflation stood at 12.4% for August. The latest figure means the average annual grocery bill will increase from GBP4,610 (US$5,396) to GBP5,181 if consumers don’t make changes to what they buy and how they shop to cut costs. Milk, butter and dog food categories have seen prices jump especially quickly, with Kantar citing inflation of 31%, 25% and 29% respectively.
Take-home grocery sales increased by 3.8% over the 12-weel period. This is the third month in a row the sector’s sales have grown after over a year in decline as a consequence of comparisons with the pandemic.
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On the success of the discount supermarkets, Fraser McKevitt, UK head of retail and consumer insight at Kantar, said: “Back at the start of the 2010s, Tesco, Sainsbury’s, Asda and Morrisons together accounted for over three-quarters of the sector but that traditional big four is no more. The discounters have seen dramatic sales increases in recent months, bringing more and more customers through their doors.
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By GlobalData“Aldi has done well to expand its shopper base, supported by consistent store openings, and with 14.2 million consumers visiting the grocer in the past three months. Meanwhile, for the fourth month in a row, Lidl was the fastest growing grocer and recorded its strongest sales performance since October 2014.”
A search for value from consumers has also seen an expansion in supermarket own-label ranges.
McKevitt said: “Their efforts seem to be well received by consumers with sales of the very cheapest value own-label products up by 33% this period versus a year ago and nearly one in four baskets containing one of these lines.”
Just Food analysis, June 2022: The pricing predicament – food brands in an inflationary climate
