Aldi and Lidl on way to eclipse rivals in 3 years
...that’s the worrying message to Asda, Sainsbury’s and Tesco’s new discounter Jack’s
ALDI and Lidl are preparing to dismantle the dominance of Britain’s biggest supermarkets within three years despite frenzied efforts to stop them.
The German discounters are growing so fast that their combined share of the grocery market could eclipse Asda and Sainsbury’s by 2021.
The historic switch will take place despite moves by the three biggest supermarkets to cut price, which have included Tesco launching Jack’s. The new chain, first reported in The Mail on Sunday, is named after Tesco founder Jack Cohen.
Jack’s will open in St Helens and Edge Hill in Liverpool on October 4, taking total stores to four.
Aldi and Lidl have embarked on such an expansion drive that the launch of Jack’s and other attempts to fight back may come too late.
Aldi and Lidl have opened a total of 123 stores in the past year, according to new figures from construction analysts Barbour ABI.
By comparison the biggest three have opened just ten stores between them – as Britain’s love affair with hypermarkets has cooled and the largest retailers have called off their race for more space.
On top of this, Aldi and Lidl have fired off 116 planning applications in the same period – mainly stores they hope to build in the years ahead. This compares with just 15 applications submitted by the biggest three, which includes two Jack’s stores. Bryan Roberts, at shopper consultancy TCC Global, said: ‘They are closing in. I’ve spoken to a number of supermarket chief executives who say their natural assumption over time is that Aldi and Lidl could have at least 20 per cent of the market between them.’
The combined market share of Aldi and Lidl hit 13.1 per cent in the 12 weeks to September 9 – an increase of 0.8 per cent on the same period a year before. If that continues for three years they will surpass Asda and Sainsbury’s, currently 15.3 per cent and 15.4 per cent respectively. But the encroachment of the discounters could be hastened if Asda and Sainsbury’s are forced to dispose of stores following the announcement in June of their mega-merger.
Sources, including several senior figures in the grocery sector, said they could be forced to hive off ‘well over’ 100 stores by the Com- petition and Markets Authority. The planned merger has been widely interpreted as a reaction to the irrevocable changes inflicted on the supermarket sector by Aldi and Lidl, as well as concerns that food retailing could be under threat from Amazon.
Sainsbury’s chief executive Mike Coupe a nd Asda boss Roger Burnley have insisted their chains will be run separately.