Lidl leapfrogs Waitrose in Britain's supermarket wars

[LONDON] Discounter Lidl has overtaken upmarket Waitrose in Britain's fiercely competitive grocery market, industry data showed on Tuesday.

Lidl and rival German discounter Aldi have gained ground against Britain's big four supermarket chains - market leader Tesco, Sainsbury's, Asda and Morrisons - by opening lots of new stores which is fuelling their sales growth.

Lidl has increased its market share to 5.2 per cent to become the country's seventh largest supermarket, market researcher Kantar Worldpanel said, usurping Waitrose.

Waitrose has a loyal middle class clientele who favour its high quality products but even it has started to lose out to Aldi and Lidl, who have pushed prices down across the sector.

Kantar Worldpanel said Lidl's sales rose 18.9 per cent year-on-year in the 12 weeks to Aug. 13, while Aldi's sales rose 17.2 per cent, giving it a market share of 7 per cent.

"Ten million households visited (Lidl's) expanding network of stores during the past 12 weeks, with alcohol and fresh produce performing particularly well," said Fraser McKevitt, head of retailer and consumer insight at Kantar Worldpanel.

All of the big four increased their sales for the fifth consecutive period, a run of success not seen since 2013, partly reflecting grocery price inflation. However, they still all lost market share to the discounters.

The big four now account for 69.3 per cent of the UK grocery market, down from 76.3 per cent five years ago.

"That looks set to fall further in the coming months," said Mr McKevitt.

Tesco performed the best of the big four with a sales increase of 3 per cent.

Overall UK supermarket sales rose 4 per cent year-on-year.

Like-for-like grocery inflation increased slightly to 3.3 per cent after holding steady at 3.2 per cent for the past two months. The inflation has been fuelled by the fall in sterling since last year's Brexit vote.

At the current rate, price increases could add a further £138 (S$242) to the average UK household's annual grocery bill, with the price of butter and fish most affected, Kantar Worldpanel said.

Shares in Tesco were up 2.7 per cent at 0757 GMT, while Morrisons was up 0.8 per cent and Sainsbury's was down 0.7 per cent.

REUTERS