Aldi and Lidl are set to outperform rivals over Christmas, says analyst

Budget supermarket chains Aldi and Lidl are set to outperform their larger peers this Christmas as the battle for festive shoppers reaches its climax this weekend.

Retailers are hoping that Christmas will bring some cheer.
Retailers are hoping that Christmas will bring some cheer.

Analysts at Shore Capital forecast that both will record positive like-for-like sales growth and further increase their market share over the critical trading period, building on a strong performance in recent months.

“I think that the German domiciled grocery discounters will have a good Christmas overall and, relative to the pack, a very good one indeed,” said Shore’s Clive Black.

Sign up to our Business newsletter

Sign up to our Business newsletter

“No doubt the low tide of activity in November would have been felt by them too, commented upon by many, but we’d also expect some like-for-like sales growth and market shares gains too.”

The German pair have notched up a series of record trading performances over the festive period in recent years.

“Unlike most other supermarkets in the UK, both (Aldi and Lidl) are opening new stores, while they are also quite effectively evolving to limited assortment supermarkets, as opposed to their original composition as limited assortment discounters,” Mr Black added.

The latest Kantar Worldpanel statistics, which were published last week, revealed that Asda and Morrisons were the only two of the big four grocers to see positive sales growth over the previous quarter.

Leeds-based Asda was the best performer out of the big four with sales growth of 1.5 per cent in the 12 weeks to December 2. Bradford-based Morrisons saw growth of 0.5 per cent, while market leader Tesco was down 0.1 per cent and number two player Sainsbury’s was down 0.2 per cent.

Commenting on the results, Fraser McKevitt, head of retail and consumer insight at Kantar Worldpanel, said: “There’s quite a lot of momentum going with Asda. They had a couple of very rough years a few years ago.

“Everyday low pricing has become more of a reality and their standard own label lines are growing faster.”

The battle for Christmas shoppers comes after the wider high street faced turmoil during a bleak 2018.

This year has been marred by the administrations of several high-profile retailers, including House of Fraser, Maplin, ToysRUs and Evans Cycles.

High street firms and supermarkets will be hoping that Christmas, the busiest time of year for the sector, finally brings some cheer.