Aldi is poised to overtake Waitrose to become the sixth largest grocery retailer in the UK as initiatives to expand its customer base helped it to double-digit sales growth, according to the latest figures from Kantar Worldpanel.
Video: Aldi’s latest campaign encouraging consumers to switch to the discounter.
For the 12 weeks to the 20 July, Aldi’s sales increased by 32.2 per cent year on year to £1.2bn, giving it a highest ever market share of 4.8 per cent, up from 3.7 per cent a year ago. That puts Aldi’s market share just behind Waitrose on 4.9 per cent and means it could overtake the upmarket grocer in the next quarter.
Aldi has made a concerted push to appeal to more affluent consumers, most recently running a print campaign for its newly launched equestrian clothing range. It has also highlighted products such as Italian prosecco and prosciutto ham in its advertising, focusing on the savings shoppers could make by switching to Aldi without compromising on quality.
Lidl also reported double-digit growth, with sales up 19.5 per cent to give the discounter its highest ever share at 3.6 per cent. Meanwhile Waitrose saw sales increase 3.4 per cent, a “testament to its policy of maximum differentiation” according to Kantar Worldpanel director Ed Garner.
In an attempt to see off the threat of the discounters, the big four supermarkets are increasingly focusing on price with Tesco and Morrisons announcing multi-million pound investments in bringing down prices and launching high-profile marketing campaigns to shout about the changes. Sainsbury’s has also lowered its prices although it is maintaining its values messaging.
That has led to the grocery market posting its 10th successive quarterly fall in inflation, which now stands at 0.4 per cent, the lowest level since Kantar Worldpanel began recording the metric in October 2006. Market growth stands at just 0.9 per cent, the lowest level for 10 years.
“This reflects the impact of Aldi and Lidl and the market’s competitive response, as well as deflation in some major categories including vegetables, bread and milk,” says Garner.
Despite the price focus, Tesco saw its sales decline widen to 3.8 per cent in the period and its market share fall to 28.9 per cent. It has recently replaced its CEO Philip Clarke with Unilever exec Dave Lewis in an attempt to turnaround its fortunes.
Morrisons also saw its sales drop 3.8 per cent to give it 11 per cent of the market. Both Sainsbury’s and Asda managed to maintain market share on 16.6 per cent and 17 per cent respectively.