Discount grocers take the festive honours

GERMAN discount grocers Aldi and Lidl reported “record” trading in the UK over Christmas, heaping the pressure on rivals Tesco, Asda and Morrisons.
Asda CEO Andy ClarkeAsda CEO Andy Clarke
Asda CEO Andy Clarke

Aldi said it recorded its busiest Christmas since opening in Britain over two decades ago and Lidl said it had seen its best performance to date over the festive period.

Aldi, which has around 40 stores in Yorkshire, said a record number of customers visited its stores in the run-up to Christmas.

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“We had our busiest Christmas since opening in the UK and planned for this by doubling the size of our Christmas range, increasing stock levels and offering even more exclusive products,” said a spokesman.

Lidl, which has around 50 stores in Yorkshire, said 2013 had been the most successful year in its history.

Analysts believe the pair enjoyed like-for-like sales increases of up to 20 per cent over last year as hard-up shoppers went in search of bargains.

Such an increase will knock its rivals into the shade, with Tesco’s like-for-like sales expected to fall by as much as 2.5 per cent and Sainsbury’s battling to stay in like-for-like sales growth.

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Aldi is poised to launch a new advertising campaign that claims that shoppers can save an average of £28 per week if they switch over to it.

Analyst Clive Black at Shore Capital said that Aldi has gained mass approval and after starting out in less well-off districts, it now embraces broad income constituencies.

“A demonstrable winner from the straitened times has been the deep-discounters and most particularly Aldi,” said Mr Black.

“Aldi has managed to enormously broaden its appeal, leading to sales growth those others can only dream about. Such is the change in consumer perceptions, we see a positive outlook for the deep-discounters, both from further broadening appeal but also still serving the many ‘have nots’ that need price value on their doorstep.”

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He added that Lidl also poses a threat to the traditional British supermarkets

“Lidl is also an effective and successful retailer, albeit and perhaps a little unfairly somewhat in the shadows of Aldi,” said Mr Black.

“Lidl is less proprietary than Aldi, but still contains the Teutonic characteristics of German deep-discounting.”

Aldi said that its most popular festive lines included fresh lobster tails, free-range turkey and mince pies.

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“Record numbers of customers visited Aldi as they realised they could get all the festive trimmings at Aldi, while cutting the cost of Christmas and not the celebrations,” said a spokesman.

Lidl said its fresh British turkeys sold out on Christmas Eve and its Comte de Brismand Champagne Brut was the top seller in value terms in the week before Christmas.

Research by Kantar Worldpanel revealed that more than half of Britain’s households shopped in Aldi or Lidl in the 12 weeks to December 8 at a time when Tesco, Asda, Sainsbury’s and Morrisons continued to lose market share.

Kantar said Aldi grew its year-on-year sales by 30.7 per cent in the 12-week period, while Lidl’s rose 15.5 per cent. Together they had a combined market share of six per cent.

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Market leader Tesco will update on the six weeks to January 4 tomorrow, while Sainsbury’s will report third-quarter to January 4 sales today.

Asda said on Monday it enjoyed a good performance at Christmas both in store and online, but it will not release figures until February 20.

Asda’s CEO Andy Clarke said: “This was a very tough December for retailers with price conscious customers leaving it later than ever before to buy presents and do their big Christmas food shop.

“While some retailers hit the panic button early, at Asda we held our nerve and stuck with our simple strategy of no gimmicks, just every day low prices right across the store and online. It meant that customers trusted us to deliver not only on price, but also quality and good honest value. This translated into record footfall, both in store and online.

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“On December 23, a record 4.8m customers shopped with us making this our biggest ever trading day.”

Morrisons will update the market on festive trading on January 20.

The Bradford-based firm is hoping its online launch in the Midlands on Friday will help it to catch up with rivals. All 750 slots are already sold out.

It will launch the service in Yorkshire next month.