Aldi and Lidl reach record market shares, according to Kantar Worldpanel

The latest grocery market share figures from Kantar Worldpanel, published today for the 12 weeks ending March 26 2017, showed that supermarket sales increased in value by 1.4 per cent compared with the same time last year.

The slower growth was primarily due to Easter falling outside the latest 12 weeks, Kantar said. Easter fell within the comparable period last year.

Fraser McKevitt, head of retail and consumer insight at Kantar Worldpanel, said: “Despite rising prices, we’ve seen shoppers’ minds turn to healthy eating after the excess of the festive period and before the temptation of Easter. Greater demand for gluten or dairy-free products, particularly from younger shoppers, has boosted the ‘free from’ category by 36 per cent year on year. In fact, 54 per cent of the population purchased a ‘free from’ product during the past three months – that’s 3.3 million more people than last year.

“Meanwhile inflation shows no signs of abating. The price of everyday goods is up by 2.3 per cent compared to this time last year, and rising prices cost the average household an additional £21.31 during the past 12 weeks.

“We expect inflation to continue to accelerate, and as a result we’re likely to see consumers looking for cheaper alternatives. A reduction in promotional activity means the proportion of spending on promotions now stands at just 32.9 per cent – 5.5 percentage points lower than last year.

“As a result, offers are becoming a less significant option for shoppers looking to save money. Already taking market share from their branded rivals – and up nearly 5 per cent during the past 12 weeks – own label lines could be among the main beneficiaries of inflationary pressure.”

In terms of the performance of individual retailers, both Lidl and Aldi reached new record high market shares during the past 12 weeks, now accounting collectively for 11.7 per cent of the grocery market.

Sales growth of 15.0 per cent made Lidl the fastest growing retailer, increasing its share of the market by 0.5 percentage points to 4.9 per cent.

Meanwhile, Aldi grew sales by 14.3 per cent, taking its share to 6.8 per cent. An ongoing programme of store openings by both retailers meant that the two together attracted an additional 1.1 million shoppers over the past three months, according to Kantar.

Iceland posted its strongest sales growth since March 2013 – up 9.8 per cent year on year – thanks in large part to the supermarket’s fresh and chilled lines. These products now account for more than a quarter of sales at the retailer, as Iceland moves beyond its traditional focus on just frozen foods.

Mr McKevitt added: “Slowing growth rates because of the late Easter meant that Morrisons was the only one of the big four to grow sales over the period: up 0.3 per cent during the past 12 weeks. However, strong performances in produce and chilled convenience weren’t enough to stop Morrisons’ market share slipping by 0.1 percentage points to 10.4 per cent.

“Sales at Tesco were down 0.4 per cent overall, although growth in its own-label Farm Brands remains impressive one year after launch: 64 per cent of Tesco shoppers made a purchase from the line during the past 12 weeks. Despite success in this area, Tesco’s market share fell by 0.5 percentage points to 27.6 per cent. At Asda sales fell by 1.8 per cent, while Sainsbury’s declined by 0.7 per cent.”

Co-op enjoyed its 23rd consecutive period of growth, increasing sales by 0.8 per cent year on year. Meanwhile Waitrose – up by 0.3 per cent – welcomed an even longer run of success.

With its market share now standing at 5.1 per cent, the retailer has seen unbroken growth since March 2009, when it held just 4.0 per cent of the grocery market.

Both grocers were bolstered by success in premium own label: the Irresistible and Waitrose 1 ranges were the fastest-growing lines within each business during the past 12 weeks, Kantar said.