Shoppers continue to flock to discount grocers

Aldi and Lidl benefit as prices are on the rise

HIGHER PRICES have ramped up supermarket sales and more customers are shopping at discount retailers Aldi and Lidl as they try to cut the price of the weekly shop.

The latest data from Kantar Worldpanel shows that supermarket sales rose 3.6 per cent during the 12 weeks to September 10. This is the sixth consecutive month in which sales have increased by more than 3 per cent and two thirds of consumers are now shopping at Aldi or Lidl as price increases hit their pocket.

Kantar said that Bradfordbased Morrisons has seen a 38 per cent increase in sales of its premium ‘The Best’ line, making it the fastest growing premium range.

Fraser McKevitt, head of retail and consumer insight at Kantar Worldpanel, said: “Morrisons are doing very well with ‘The Best’.

“They are also seeing strong sales of alcohol and fresh foods. People are drinking less but drinking better, with strong sales of prosecco, gin and craft ale.”

He added that Morrisons is also enjoying good online growth as it catches up with rivals which launched their online offering years before Morrisons did.

Leeds-based Asda attracted an additional 482,000 shoppers – the fastest new shopper acquisition by the retailer in over three years.

“Average spend at Asda is £25.74 – the highest of any grocer – which reflects the success of its larger stores and their appeal for families,” said Mr McKevitt.

“Asda has steadied the ship and it’s not declining in sales any more.”

Kantar said people are feeling pressure on their budgets.

“Inflation is costing an extra £100 a year,” said Mr McKevitt.

“People are shopping at the discounters and buying own-label as opposed to brands. Lidl and Aldi are opening a lot more stores, but they are putting a lot of thought and effort into their products. They are not just cheaper. Lidl is doing particularly well in chilled fresh foods like salad.”

He said that inflation is expected to come down as the one-off hit after the EU referendum starts to work through the system.

“The average British household spends almost £4,200 in the grocers each year so a fall in inflation, which we expect to see as we approach the end of the year, will be a welcome relief,” said Mr McKevitt.

“But we don’t know about political instability. Who knows what will happen with politics. Shoppers care deeply about Brexit. It’s their top worry about the economy.”

However, he said that supermarkets are in a good position as whatever happens with Brexit, people have to buy food. A number of big ticket retailers such as Doncaster-based DFS Furniture have suffered from falling expenditure as people can postpone buying a new sofa.

Poor weather in August hit sales of traditional summer items, with prepared salads seeing a 6 per cent dip and sun care down 16 per cent.

In contrast, consumers spent almost £4m on cold treatments in August, an increase of almost £2m on the same month last year.

Figures from Nielsen showed that spending on own-label items is up 5.5 per cent, nearly five times the growth of branded products.

Asda has steadied the ship, it’s not declining in sales any more. Fraser McKevitt, head of retail and consumer insight at Kantar Worldpanel