Aldi and Lidl sales surge as inflation grows

Business & Economy 02 Jun 2017
Aldi and Lidl sales surge as inflation grows

Aldi and Lidl sales surge as food inflation accelerates

Grocery inflation has climbed to its highest level since the end of 2013, according to the latest supermarket industry data.

Image: Aldi is the UK's fifth biggest supermarket by market share

By John-Paul Ford Rojas, Business Reporter

Discount supermarkets Aldi and Lidl are growing sales at the fastest pace for more than two years as inflation pushes up the average price of food shopping by £119 a year.

Industry figures from Kantar Worldpanel showed grocery inflation rose to 2.9% in the 12 weeks to 21 May, its highest level since December 2013 and up from 2.6% in the 12 weeks to April.

With consumers experiencing a squeeze, Aldi and Lidl posted their strongest combined growth since January 2015, further eating into the market share of the big four supermarkets.

The latest Kantar data showed all the big grocery chains saw sales growth, boosted by higher prices.

German-owned Aldi and Lidl were the strongest, growing sales by 19.8% and 18.3% as their combined share of the market rose to 12%

Figures showed 62% of the UK population shopped in one of the cut-price chains in the 12-week period, up from 58% last year – representing an additional 1.1 million households visiting the stores.

The upturn in grocery inflation marks a rapid acceleration after more than two years of prices falling amid fierce competition, before they started to creep up again in January.

Consumer prices are being driven higher partly thanks to the collapse in the pound since last year's Brexit vote, which makes imported goods more expensive.

Lidl Shopping Trollies
Image: Lidl saw strong sales growth

Chris Hayward, consumer specialist at Kantar Worldpanel, said: "Consumers are starting to feel the pinch as prices continue to rise, with the average household spending an additional £27 on groceries during the past 12 weeks.

"That may not seem like much, but if inflation continues at its current rate over the course of a year that would mean an extra £119 spent on groceries per household.

"Overall sales in the supermarket sector grew by 3.8% year-on-year to £25.5bn – the strongest increase since September 2013.

Morrisons saw the best growth out of the big four, adding sales of 1.9%, while Tesco grew by 1.8%, Sainsbury's by 1.7% and Asda by 0.9%.

Aldi is the UK's fifth biggest supermarket by market share, ahead of Co-op and Waitrose, with Lidl in eighth.

Original Article

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