Wednesday 9 January 2019 4:06 pm

Aisle be damned: The knives are out for big UK grocers

Aldi and Lidl’s tills jingled all the way in December – handing them their highest-ever combined market share for the festive season, data from Kantar Worldpanel showed this week.

All the major supermarkets lost market share in the 12 weeks to 30 December as Aldi’s sales jumped 10.4 per cent while Lidl’s were up 9.4 per cent. Their combined market share has hit a record 12.8 per cent, up from 11.4 per cent the previous year. Aldi revealed that it had its best ever Christmas as sales rose to almost £1bn in December.

Read More: Store wars: Aldi is in no mood to be Jack's of all trades

Such was their festive charm that two-thirds of all households shopped at either Aldi or Lidl over the 12-week period – a remarkable feat for the budget outlets, who have been targeting the middle-classes.

Proof of the discounters’ merry Christmas came in the same week as Sainsbury’s warning of an “uncertain” outlook as its Christmas sales slumped while its small rival Morrisons was among the top FTSE fallers on Tuesday after it reported a slowdown in sales growth at its stores.

Christmas might have belonged to the discounters but Britain’s store wars are set to intensify in the New Year with big supermarkets already slashing prices to lure customers.

Read more: Why 2019 will not mark the death of the high street

Earlier this week, Morrisons said it would cut prices by an average of 20 per cent on 935 products while Tesco, which is due to update the market tomorrow, said it was slashing the price of hundreds of products this month ­– in some cases by more than 50 per cent.

Come March the Competition and Markets Authority (CMA) will give its verdict on the £12bn mega-merger of Sainsbury’s and Asda which could stall the two discounters’ trailblazing growth. The CMA’s decision to include the impact of Aldi and Lidl in its investigation is expected to increase the chances of the deal going through and could limit the number of stores the merged entity would have to shed.

2019 is going to be monumental for grocers with mergers, aggressive store-opening programmes and brand launches on the cards amid changing consumer habits. However, shoppers are bound to push their trollies towards supermarkets that offer the lowest prices. But with grocers’ margins at record lows already, supermarket bosses will have to justify price cuts to shareholders who will be keeping a close eye on balance sheets.

The fight for every customer is as fierce as ever, and the discounters are now really showing their muscles.

Read more: Asda and Sainsbury's mega merger could hit Aldi and Lidl's trollies