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Lidl overtakes Waitrose in Britain’s supermarket wars

 

 

 

LONDON (Reuters) – Discounter Lidl [LIDUK.UL] has leapfrogged upmarket Waitrose [JLP.UL]

in Britain’s competitive food retail market, industry data showed on Tuesday,

a sign that cash-strapped shoppers are still having to count their pennies.

 

Lidl and rival German discounter Aldi [ALDIEI.UL]

have steadily cut into the market shares of Britain’s big four supermarket chains –

leader Tesco (TSCO.L), Sainsbury’s (SBRY.L), Asda (WMT.N) and Morrisons (MRW.L) –

with aggressive store openings fuelling their sales growth.

 

The two discounters started opening stores in Britain in 1994 and 1990 respectively,

but their big breakthrough came when the economic crisis hit in 2008

and more British shoppers were prepared to give them a go.

 

In February, Aldi overtook the Co-operative (42TE.L)

to become Britain’s fifth largest supermarket and on Tuesday Lidl

recorded a market share of 5.2 percent becoming the No. 7,

market researcher Kantar Worldpanel said, usurping Waitrose.

 

Waitrose has a loyal middle class clientele but even it has felt the effect of Aldi and Lidl,

who have pushed prices down across the sector.

 

Kantar Worldpanel said Lidl’s sales rose 18.9 percent year-on-year in the 12 weeks to Aug. 13,

while Aldi’s sales rose 17.2 percent, giving it a market share of 7 percent.

 

“Ten million households visited (Lidl’s) expanding network of stores during the past 12 weeks,

with alcohol and fresh produce performing particularly well,” said Kantar Worldpanel’s Fraser McKevitt.

 

He said that Aldi attracted 1.1 million more shoppers through its doors than this time last year.

 

“Rising food price inflation continues to stretch household budgets

and as a result consumers are increasingly focussing on the price

that they pay at the till,” Matthew Barnes, CEO Aldi UK and Ireland, said.

 

LOSING MARKET SHARE

 

Though all of the big four increased sales for the fifth consecutive period –

a run of success not seen since 2013 – it partly reflected grocery price inflation

and they still all lost market share to the discounters.

 

The big four now account for 69.3 percent of the UK grocery market,

down from 76.3 percent five years ago.

 

“That looks set to fall further in the coming months,” said McKevitt.

 

Tesco was the strongest performer among the big four,

with a sales increase of 3 percent, sending its shares as much as 3.9 percent higher.

 

Overall UK supermarket sales rose 4 percent year-on-year.

 

Like-for-like grocery inflation increased slightly to 3.3 percent

after holding steady at 3.2 percent for the past two months.

 

The inflation has been fuelled by the fall in sterling since last year’s Brexit vote.

 

At the current rate, price increases could add a further 138 pounds ($177.3)

to the average UK household’s annual grocery bill,

with the price of butter and fish most affected, Kantar Worldpanel said.

 

Overall, British retail sales growth slowed in July,

adding to worries about a fall in consumer demand, official data showed last week.

 

Reporting by James Davey; Editing by Susan Fenton and Jane Merriman

 

Our Standards:The Thomson Reuters Trust Principles.

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