Aldi and Lidl hit market share high while shoppers await impact of Brexit

Supermarket sales slid 0.2% in the 12 weeks to June 19, the figures showed.

Grocery prices fell 1.4% compared with the same period last year.

“The decline is a continuation of the slow supermarket sector growth dating back to summer 2014, primarily a result of cheaper everyday groceries brought about by a retailer price war,” said Kantar’s head of retail and consumer insight Fraser McKevitt. 

Despite a fall in overall grocery sales, Aldi and Lidl reached a combined market share high of 10.5%, holding 6.1% and 4.4% of the market respectively.

Lidl’s sales jumped 13.8% and Aldi’s advanced 11.5% compared with the same period last year, as 58% of Britons visited one of the discounters at least once during the period.

Sales at Tesco dropped 1.3%, while at Morrisons sales fell by 2.4%, both reflecting the ongoing impact of store disposals.

Sainsbury’s sales dipped 1.4%, but Asda continued to be the worst performing member of the big four as sales tumbled 5.9%.

All four members of the big four suffered dips in their market share, with Asda’s spiralling from 16.5% to 15.6%. 

While the impact of the EU referendum result is too recent to be felt, Kantar predicts that “resilient” grocery sales are unlikely to see a significant fall, but conceded that prices could be impacted.

McKevitt said: “While these latest figures predate the EU referendum result, the immediate economic uncertainty is unlikely to cause a substantial fall in grocery volumes, as demonstrated by the 2008 financial crisis when basic food, drinks and household sales proved resilient.

“With an estimated 40% of the food we consume sourced from overseas, any long-term change in exchange rates may threaten the current period of cheaper groceries.” 

McKevitt added that it has been a “good period” for smaller retailers, with the Co-op cementing its “recent recent revival” by growing sales 2% during the period to take its market share to 6.3%.

Meanwhile at Waitrose, small but rapidly increasing sales of the Waitrose 1 brand have helped the retailer grow sales 1.3% as its market share edged up to 5.2%.

“Waitrose has now had an unbroken period of growth dating back to 2009 – the best run of any retailer outside of the discounters,” McKevitt said.

Nielsen reports growth

Conflicting data from Nielsen suggested that overall grocery sales increased during the four weeks ending June 18, as the value of sales advanced 0.4% compared to the same period last year. 

Nielsen said it was the first time for a year that the grocery sector had reported growing sales and only the third year-on-year increase since the start of 2014. 

According to the data, Aldi and Lidl’s combined market share now stands at 11.5% - higher than the figure suggested by Kantar.

But Nielsen agreed that all of the bog four had lost share during the period and also pinpointed Asda as being the worst performing grocer, with a sales fall of 6.4% driving its market share down to 14.7%. 

That left the Walmart-owned supermarket chain 1% adrift of Sainsbury’s, which suffered a 2.3% drop in sales.

Tesco’s market share contracted to 27.7% after sales dropped 2.5%, while Morrisons market share inched down to 10.5% following a 2.1% decline in sales - a figure that made it the best performing member of the big four. 

Nielsen’s UK head of retailer and business insight Mike Watkins said: “Whilst the Brexit decision is unlikely to change shopper behaviour in the short term, we can expect some change in consumer sentiment and, possibly, a return to low inflation next year – should sterling’s depreciation continue and global commodity prices strengthen.

“However, for now, the battle for market share continues and shoppers will benefit from falling prices at food retailers due to price cuts and the deflationary environment.”