Discount supermarkets 'cashing in'

28 May 2008 04:38pm

Shoppers have been flocking to discount supermarkets as the consumer spending slowdown tightens its grip on household budgets, new figures show.

Aldi enjoyed year-on-year sales growth of nearly 19% in the 12 weeks to May 18, market researcher TNS Worldpanel said, while cut-price rival Lidl saw takings rise by just under 10%.

In a further sign of a shopping shift, price-focused chains Farm Foods and Iceland also posted double digit rises in sales during the period.

At the same time, heavyweights such as Tesco and Sainsbury's saw dips in their share of the sector's annual £120 billion market.

TNS' data showed the clear winner in terms of sales growth during the period was Aldi, whose till roll rose 18.9% year-on-year to £577 million. Its market share also improved to 2.8%, from 2.5%.

TNS' director of research Edward Garner said: "This is virtually solely fuelled by new shoppers visiting the stores rather than existing shoppers spending more."

He added that German-owned Aldi had been investing heavily in new stores, boasting more than 300 in the UK at the moment.

"This investment is being rewarded with strong growth in the current climate," Mr Garner said.

Next best performer in terms of sales growth was Iceland, whose takings grew 12.2% to £352 million. The chain's market share also improved, up 0.1% to 1.7%. Farm Foods saw sales break through the £100 million barrier during the period, rising 10.7%. And Lidl's sales were 9.6% ahead at £478 million.

Despite the shifting shopping patterns, supermarkets still enjoyed strong growth in grocery sales, up 6.6% overall. Tesco remained far and away the sector leader despite its market share dipping 0.2% to 31.1% . The giant's tills rang up £6.4 billion of sales during the period, 6% better year-on-year, TNS said.

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