Lidl achieves record market share as grocery inflation returns to ‘more normal’ levels

Lidl achieved its highest-ever market share of the grocery sector in the 12 weeks to 12 May, with 8.1% of the market, compared to 7.7% in the same period last year.

According to figures from Kantar, the discount supermarket remains the sixth biggest grocer by market share in the UK, but is closing the gap between its next-biggest competitor, Morrisons, which has a market share of 8.6%, slightly down from 8.7% in the same period last year.

In September 2022, discounter Aldi displaced Morrisons from its position as the UK’s fourth biggest supermarket by market share, knocking it out of the traditional ‘big four’, which includes Tesco, Sainsbury’s and Asda. In this latest period, Aldi’s market share has slipped slightly, from 10.1% in the 2023 time frame to 10% in the most recent 12 weeks to 12 May.

Aldi’s value sales continue to rise, at 2.2%; however, its rival Lidl grew its sales much faster, at 9.4%. Kantar partly attributes Lidl’s strong growth to its bakery section, as well as its Lidl Plus loyalty app.

After nearly two and a half years of rapidly rising prices, it could take a bit longer for shoppers to unwind the habits they have learnt to help them manage the cost of living crisis.

Fraser McKevitt, Kantar

The latest data from Kantar also shows a “more normal” rate of grocery inflation. Grocery price inflation fell to 2.4%, marking its lowest level since October 2021. This is the fifteenth consecutive month of grocery price inflation falling, it is now just 0.8 percentage points higher than the 10-year average of 1.6% between 2012 and 2021.

As the rate of inflation slows, shoppers ordinarily move away from inflationary behaviours like trading down; however, as the continued success of the discounters shows, these behaviours remain sticky.

Own-brand premium products drive success for Aldi and Lidl at Christmas

“After nearly two and a half years of rapidly rising prices, it could take a bit longer for shoppers to unwind the habits they have learnt to help them manage the cost of living crisis,” says Kantar head of retail and consumer insight, Fraser McKevitt.

“Own-label lines are proving resilient, for example, and they are still growing faster than brands, making up over half (52%) of total spending.  Sales of premium own label ranges continue to increase too, up by 9.9% compared with a year ago.”

While cost of living-related behaviours remain persistent, overall take-home grocery sales rose by 2.9% over the four weeks to 12 May, with Kantar suggesting the early May bank holiday bolstered sales.

Over the summer, sporting fixtures have the potential to further bolster sales, particularly in categories like alcohol, McKevitt says.

“During England’s quarter-final match against France in the 2022 FIFA Men’s World Cup, take-home beer sales hit their biggest daily takings of the year outside of Christmas. Especially if it’s paired with warmer temperatures, this year’s summer of sport could deliver a welcome boost for the sector,” he says.

Continued strong performance from Ocado

Ocado was again the fastest-growing grocer over the 12 weeks to 12 May, with sales up by 12.4. Its market share is now at 1.8%, up from 1.7% in the year prior. Its market share rises to 3% for London only.

Co-op and Asda were the only grocers to see year-on-year sales declines in the 12-week period. Co-op’s sales slipped slightly by 0.6%, and its market share fell from 5.7% to 5.4%.

Asda’s sales fell by 2% year-over-year. It saw a slip in market share, dropping to 13.1% versus 13.9% in the same period last year. Last week, Asda launched a new brand identity and summer campaign, with the supermarket seeking to reassert its individuality as a brand.