Aldi and Lidl Pick Up Pace as U.K. Supermarket Price Wars Deepenby
Discounters Aldi and Lidl stepped up their march across the U.K. supermarket industry in the last 12 weeks as the impact of price cuts by the country’s large grocers faded.
Lidl’s sales rose 18 percent and Aldi’s by a similar amount through Oct. 11, researcher Kantar Worldpanel said in a statement Tuesday, stronger than in the previous month.
The acceleration of the discounters’ growth deals a blow to grocers such as Tesco Plc and Wal-Mart Stores Inc.’s Asda, whose market share has been eroded by the German upstarts. Those two chains, Britain’s biggest, saw the steepest rate of sales decline in the 12-week period, led by a 3 percent drop at Asda, according to Kantar.
“The supermarket price war shows no signs of abating,” Fraser McKevitt, head of retail and consumer insight at Kantar Worldpanel, said in the statement. “For the second successive month, Lidl has reached a new share high.”
The U.K.’s largest grocers are continuing to adjust their offer in an effort to fend off the stiffer competition. This month, Tesco began a price-matching program that offers immediate discounts, rather than money-off vouchers, while Asda announced Monday that it will redirect planned non-grocery investment back into its supermarkets.
Sales at Tesco fell 1.7 percent in the 12 weeks, while Wm Morrison Supermarkets Plc’s revenue dropped 1 percent, Kantar said. J Sainsbury Plc boosted sales by 1.1 percent due to a strong performance in its online business and its smaller-format stores. Sainsbury surprised investors in September by forecasting that full-year pretax profit will surpass analysts’ estimates.