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Retailer Spotlight - Aldi steps ahead as UK’s fifth largest supermarket

 

Posted At: 14 February 2017 16:15 PM
Related Categories: Retail, Retailers

 

Aldi, the German-owned supermarket, has overtaken the Co-op to become the UK’s fifth largest supermarket. New figures from Kantar Worldwide show that a 12.4% year-on-year sales rise has taken Aldi’s market share to 6.2%, ahead of the Co-op's 6%. FSP previously reported on Aldi taking over from Waitrose as the country’s sixth largest supermarket just under two years ago. It is Aldi’s latest growth milestone; a decade ago, it was the UK’s 10th largest food retailer, accounting for less than 2% of the grocery market.

The move follows an ambitious programme of store openings – 70 stores in the last year- and attracting 826,000 more shoppers than the same period last year. The group plans to open a further 70 new stores this year in response to customer demand. The figures highlight the challenges faced by the big players from discounters like Aldi and its rival Lidl. Despite a slower pace of growth in the past three years, Aldi and Lidl now share nearly 11% of the entire UK grocery market, while Tesco, Sainsbury’s and Asda continue to lose ground.

Much of Aldi’s success has come down to its simple proposition, aimed to save customers time as well as money, and centred on a much smaller range of goods than rival stores. The simplified approach has shifted how the big four supermarkets operate, as they move away from multi-buys and discounting. Traditional counterparts are responding instead with everyday low pricing and a simpler proposition as they try to win shoppers back.

Aldi UK’s chief executive, Matthew Barnes, attributed the supermarket’s success to its “unique offering resonating with British shoppers.” He said: “Aldi customers get products of comparable quality to the leading brands at prices that are significantly cheaper than any of our competitors.”

Looking at the big four supermarkets, Morrisons was the only one to gain market share in the same period, growing to 10.9%, primarily due to the success of its premium own label. With 28% of the UK market share, Tesco remains the market leader in the UK.

Aldi has also announced plans to invest and extra $1.6 billion to upgrade its 1,300 U.S. stores.

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