Sales growth for the discounters Aldi and Lidl is at its lowest level in five years, according to new data from Nielsen retail.
During the 12 weeks to November 5, 2016, Aldi’s year-on-year sales revenue increased by 11.3% while Lidl’s was up 5.2%. This made their combined growth the lowest since the end of 2011.
Even so, their current growth still far outstrips the 1.4% rate for the UK grocery market in general. Between them, in fact, Aldi and Lidl now account for 11.8% of UK grocery sales, which is up by 11.1% on a year ago.
“It’s inevitable that a time would come when the discounters experienced a slowing growth rate, and three factors have combined to see this happen,” said Nielsen’s UK head of retailer and business insight, Mike Watkins (pictured above).
“Firstly, the growth rates a year ago were particularly high due to a period of new store openings, so it’s always harder to maintain growth against that.
“Secondly, the supermarkets have had more time to alter strategies to fend off the discounters, particularly Tesco whose recovery continues apace – its 2.3% growth was the strongest in over three years.
“Finally, shoppers are still spending freely and we’ve seen a return of sustainable growth in the volume of items people are buying, helped by industry-wide price cuts, so one of the discounters’ USPs is less pronounced in shoppers’ minds.”
On shoppers continuing to spend freely, Mr Watkins said this trend is surviving despite the so-called Brexit impact, which, he added, isn’t expected to “hit” consumer spending until next year.