Discount supermarkets suffer slow sales growth

Fri, 24 Jul 2009
 
Get the latest prices, codes, vouchers & deals fortnightly.
The big supermarkets are fighting back according to the latest information from TNS .

Discount food stores such as Aldi. Lidl and Iceland were the places to shop when the recession first hit. Middle-class shoppers forwent brand names, reduced packaging and organic food for cheaper prices.

The result was a huge success for the no-frills shops, a surprise because these retailers were never considered a threat to the main big supermarkets.

According to TNS last summer saw Aldi’s sales rise by 17 per cent, with a 25 per cent increase in people visiting their shops. By December Aldi’s growth had grown by 25 per cent in a market that was showing volume growth of 6.2 per cent. Tesco on the other recorded only a 4.6 per cent growth.

The major supermarkets were not going to take it on the chin, instead they fought back. Although Aldi, Iceland and Lidl’s sales were up in July it was now the turn of Morrison, Asda and Waitrose to show what they are made of by posting higher sales results for the same period.

Paul Foley, Aldi’s UK managing director said, "We have slowed down in the last 12-14 weeks, but we were up against meteoric growth from last year. They were enormous numbers. It is not a reverse; it is just not growing at the same pace."

Aggressive promotions by the big supermarkets proved a hit with shoppers, which have had an effect on shops like Aldi as they do not sell many brand names. The major supermarkets have also introduced new discount ranges and heavy advertising campaigns to help the fight back.

Chris Longbottom of TNS said, "The promotional activity the major multiples have put in place has stolen the wind out of the discounters' sails."

He added that discount grocers are not destinations for the weekly shop but more of a top up shop. With the big supermarkets hitting back with more offers and reduced pricing shoppers are being pulled back.

Link to this page

Copy and Paste the following HTML into your page.