Tuesday 2 March 2021 1:08 pm

Aldi and Lidl sales growth slows as discounters struggle to compete with Big Four's online capabilities

The growth of the discount supermarkets Lidl and Aldi has slowed as the Big Four UK grocers benefitted from their more established online presence during the pandemic.

German budget grocers Lidl and Aldi reported that sales were up 10.9 per cent and 5.6 per cent respectively in the 12 weeks to 21 February.

However, three of the UK’s biggest supermarkets – Sainsbury’s, Morrisons and Tesco – all saw stronger sales growth during the period due to their stronger online capabilities.

Morrisons market share increased by 0.1 percentage points to reach 10.3 per cent of the market, with sales up 13.9 per cent.

Sainsbury’s sales were up 12.1 per cent to hold market share of 15.6 per cent, and Tesco grew its market share by 0.2 percentage points to 27.4 per cent, with sales growth of 13.2 per cent.

Asda was the only major UK supermarket to record slightly lower sales growth than Lidl, with a 10.3 per cent jump.

Meanwhile, online supermarket Ocado toasted sales growth of 35.3 per cent, with its market share nudging up 0.3 percentage points to 1.7 per cent, as it continued to expand outside of its London heartland.

Online grocery sales during the latest month reached a new record share, accounting for 15.4 per cent of sales, up from 8.7 per cent last year, according to data from Kantar.

Neither Aldi or Lidl, which have both challenged the traditional UK supermarkets in recent years, have in-house grocery delivery capabilities, with consumers only able to buy digitally using third-party apps such as Deliveroo. 

Fraser McKevitt, head of retail and consumer insight at Kantar, said: “Nearly a quarter of households bought groceries online during the past month, making the most of home deliveries especially to get hold of bulkier goods like canned foods, breakfast cereals and soft drinks. 

“It’s been an extraordinary twelve months for online and three million tonnes of food alone have been delivered to people’s homes over the past year.  

“It’s a habit that seems to be sticking among British consumers and internet orders now make up an average of 65% of grocery spending each month for people who do shop online.  

“Grocers should take note of the customer satisfaction gap between online and in store – people that buy on the internet are typically 7 percentage points happier with their shopping trip than shoppers at bricks and mortar stores.”