Discount supermarkets gain as consumers cut back on spending

Consumers in the UK continue to cut back as day-to-day living costs continue to rise and as a result, discount supermarkets are benefiting.

Figures from TNS Worldpanel show that bargain hunters have helped sales at Aldi, Lidl and Iceland soar.

In the 12 weeks to August 10, sales at Aldi rose 19.8% compared to last year, giving it a new record market share of 3% while sales at Lidl rose 12.3%.

Aldi and Lidl are planning an aggressive expansion plan across the UK.

The only other discount store to grow faster than Aldi was Farm Foods, the frozen food specialist, where sales rose 20.8%.

Iceland, also a discount frozen food specialist, experienced the strongest sales growth for many years, with a 14.4% increase.

According to Ed Garner, TNS director of research, the new breed of discount shoppers are mainly younger households with children, whose finances have been stretched the most.

It was also revealed that consumers are shunning more expensive shops as data showed Marks and Spencer’s share of grocery sales had fallen 2.1% in the four weeks to 8 August, while Waitrose’s market share grew by 0.4%.

Meanwhile, Tesco and Sainsbury both experienced slight falls in market share, down from 31.8% to 31.6% and 16.1% to 15.8% respectively.

Asda saw its share rise to 17% from 16.8%, while Morrisons crept up to 11.1% from 10.9%.

Official figures show that food price inflation is currently at 13.7%, with meat and bread prices up 16% compared with last year and vegetables up 11%

Many reports have identified that consumers continue to cut back on non-essential items showing that the credit crunch continues to bite.

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