Aldi has reach record market share in the UK
(Picture: REUTERS)Aldi and Lidl are emerging as big winners from the cost of living crisis as shoppers trade down amid soaring supermarket prices.
The German discounters are the only supermarkets seeing market share growth on last year, according to new research from Kantar, with record expansion at Aldi.
Both retailers grew market share by 3.6% in the 12 weeks to March 20, even as the overall market shrank by 6.3%.
Shoppers are turning to the budget-friendly grocers as prices at the tills soar. Supermarket inflation has now hit 5.2%, Kantar said, its highest level since 2012. Prices are rising fastest for items such as savoury snacks, dog food and cat food, while the price of fresh bacon is falling.
Rising prices come as manufacturers and grocers feel the squeeze on everything from higher energy costs to wages.
Price pressure is only set to intensify as war in Ukraine disrupts the export of grain and supply of Russian fuel. Bank of England governor Andrew Bailey warned this week that the UK faces a “historic” energy shock this year worse than at any point during the 1970s.
Fraser McKevitt, head of retail at the market research firm, said: “What we’re really starting to see is the switch from the pandemic being the dominant factor driving our shopping behaviour towards the growing impact of inflation, as the cost of living becomes the bigger issue on consumers’ minds.”
Sales of own-label supermarket goods -- typically the cheapest option -- have risen from 49.9% of supermarket spending to 50.6%, Kantar said.
Victoria Scholar, head of investment at Interactive Investor, said: “As the cost-of-living bites, price is the most critical factor when it comes to consumer demand.”
On Monday, Asda launched a new “Just Essentials” budget range spanning everything from fresh meat to cupboard staples in response to the rising cost of living.
Kantar’s data shows Asda’s sales were down by more than £400 million in the 12 weeks to 20 March compared to the same period last year.
McKevitt said: “More and more we’re going to see consumers and retailers take action to manage the growing cost of grocery baskets.”
Aldi and Lidl are both planning big expansions in the UK. Last September Aldi announced plans to invest £1.3 billion in opening 100 new stores over the next two years, while Lidl is set to open around 200 new shops by 2025.
