Aldi set to break ‘Big Four’ stranglehold as it adds 1m shoppers

BUDGET chain Aldi is challenging the dominance of Britain’s ‘Big Four’ supermarkets after attracting an extra million customers in the past year.

The budget chain looks set to overtake Morrisons as the fourthbiggest grocer as the cost-of-living crisis prompts shoppers to search for cheaper no-frills options.

The boost means German-owned Aldi has almost quadrupled its market share in the past decade to 8.8 per cent, as Morrisons has gradually slipped to 9.5 per cent.

The sector is dominated by Tesco, with 27 per cent of sales, followed by Sainsbury’s (15 per cent) and Asda (14.1 per cent) – all of which are down on a year ago.

Low-cost Lidl was the only other supermarket chain to increase its share compared to 2021, and now claims a 6.6 per cent slice of the market. Between them, Aldi and Lidl now account for almost £1 in every £6 spent at checkouts.

Fraser McKevitt, head of retail insight at research company Kantar, said the squeeze on household finances were driving customers to lower-cost options. ‘Over a million extra shoppers visited both Aldi and Lidl over the past 12 weeks compared with this time last year,’ he said. ‘We’re seeing a clear flight to value as shoppers watch their pennies.’

Research last week revealed that soaring inflation, pandemic-related supply-chain issues and the war in Ukraine could cause the average food bill to rise by £271 this year.

The Big Four are expected to fight to protect and grow their market share, with price promotions seen as the most likely weapon.

Tesco has added more Clubcard deals and urged customers to spend the £17 million-worth of unclaimed vouchers that are set to expire this month. It is also planning to open 65 new stores in the next year.

Sainsbury’s, which has just reported £854million annual profits, says it is trying to limit price increases despite facing higher costs from wholesalers, while Asda has launched its Just Essentials line of 300 budget options.

Morrisons recently announced cuts to the price of everyday goods, with chief executive David Potts acknowledging: ‘It’s been a tough year for many families who find themselves stretched.’

The Yorkshire-based chain will be hoping the cuts on 400 items will reverse its decline in market share, down from ten per cent this time last year. Aldi’s share was eight per cent 12 months ago. The Co-op has a six per cent share and Waitrose 4.8 per cent, according to Kantar.

Aldi opened its first British branch in Birmingham in 1990, with Lidl following four years later.

At first, shoppers turned their noses up at the discount stores, but they have gradually drawn in more middle-class shoppers thanks to eye-catching promotions, such as lobsters priced as low as £3, and a policy of locating new stores in more affluent areas.

Aldi now has 950 sites and Lidl 919, compared to about 500 Morrisons stores and more than 3,400 Tescos. According to YouGov, Aldi is also the supermarket most liked by its customers, just ahead of Marks & Spencer.

‘A clear flight to value as customers watch pennies’