Discounters eat further into grocery market

Budget supermarket chains Aldi and Lidl are set to outperform their larger peers this Christmas.

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 stellar run of form.

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

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

The pair have notched up a series of record trading performances during the festive period in recent years, wiping the floor with established players.

Over the past decade, Tesco, Asda, Sainsbury’s and Morrisons have all seen their market share eroded as consumers moved towards budget brands.

The latest consumer confidence index from GfK showed consumers felt more downbeat as Christmas approached than they did when the year started, in the face of Brexit worries.

Last month, Sainsbury’s added to fears over lacklustre consumer spending in the run-up to December 25, as it warned of an uncertain outlook amid “unprecedented times” for the grocery sector.

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

Lidl and Aldi have done well over the vital Christmas period.