Aldi and Lidl benefit as inflation pushes up supermarket prices

Aldi and Lidl are being boosted by shoppers facing rising prices as higher inflation continues to push up the cost of a supermarket trip. Pic: PA.
Aldi and Lidl are being boosted by shoppers facing rising prices as higher inflation continues to push up the cost of a supermarket trip. Pic: PA.
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Discount supermarkets Aldi and Lidl are feeling the benefit as inflation causes the price of household staples to rise in supermarkets.

Research shows that grocery inflation is up 2.3% versus the same time last year, with products such as butter, fish, tea and skincare all seeing price hikes.

Rising prices will cost the average household an additional £21.31 at the tills, the group said.

Fraser McKevitt, head of retail and consumer insight at Kantar, which carried out the research, said: "We expect inflation to continue to accelerate, and as a result we're likely to see consumers looking for cheaper alternatives."

He added that sales of supermarkets' own label products and discounters such as Aldi and Lidl stand to benefit.

The German duo both hit record high market shares over the past 12 weeks, and now have a collective 11.7% share of the market.

Aldi's market share rose from 6% to 6.8% in the 12 weeks to March 26, and Lidl saw its share grow from 4.4% to 4.9%, according to Kantar.

Aldi boss Matthew Barnes said: "As inflation begins to stretch household budgets consumers will increasingly look for opportunities to reduce their grocery bills."

"Our model means that we can continue to offer our customers outstanding value for money and guarantee the prices they pay ... are the lowest in Britain."

Separately, figures from Nielsen also show Aldi's market share rising 0.9% to 8% in the 12 weeks to March 25, compared to a year earlier, while Lidl increased 0.5% to 5.3%.

Nielsen figures showed that Tesco held the top spot among UK grocers, clocking only a marginal 0.5% drop to capture 27.1% of the market.

Sainsbury's saw its own market share fall 0.4% to 15.4%, while Asda dropped 0.5% to 14.1% and Morrisons held on to 10%.

Kantar also flagged the increasing popularity of "free from" food, such as gluten or dairy-free products.

Demand for these items, particularly from younger shoppers, helped boost the category by 36% year on year.