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Lidl's rise 'sets alarm bells ringing' among rivals

By Audrey Watson

Published 07/08/2015

More customers are visiting Lidl stores
More customers are visiting Lidl stores

Northern Ireland consumers are heading for discount supermarket Lidl in increasing numbers with sales at the German company up over 20% in the past year, new data shows.

Consumer spend figures from Kantar Worldpanel for the 52 weeks ending July 20, 2015, show that Lidl posted the strongest growth, increasing sales by 22.1% on the same period in 2014.

While Tesco holds on to the market share top slot at nearly 35% (despite a fall of 1.4% on last year), Lidl increased its slice from 4.1% to 4.9%.

Asda also increased its market share from 17% to 17.2%, and consumer spend by 1.9%.

Sainsbury's market share fell from 18.1% to 17.6% in the 52 weeks ending July 20, 2015, while spending at its stores was also down 1.7%.

Smaller multiples such as Dunnes and Marks and Spencer as a whole increased their market share from 8.8% to 9.1%. Spending in the category was also down 6.8%.

Ulster University Business School retail analyst Donald McFetridge said that "former paragons of retail excellence" such as Tesco and Sainsbury's were losing out. And he said rival Lidl was building up its share in a quiet fashion.

"This is a growing trend, and the latest figures more than stack up in favour of discount chain Lidl, which has surreptitiously and carefully been growing market share in Northern Ireland at an accelerated rate since they entered the marketplace.

"Asda increased total sales by 1.9%, while Lidl managed a staggering 22.1% increase which must surely be setting alarm bells ringing in boardrooms at head offices all over the City of London."

But he said it wasn't just the top two multiples of Tesco and Sainsbury's who were losing out to Asda and Lidl.

"The symbol group sector (which includes Spar, Mace and Centra), has decreased its sales volume by 2.9%, while other outlets such as Boots, greengrocers and butchers have had a marginal decrease of 0.7%.

"These statistics deserve detailed and careful scrutiny, but it is clear that the headline figures will present fresh challenges to all those operating in a cut-throat sector.

"The supermarket sector has always been fiercely competitive but never more than at present," he said. But he added that "no matter what sort of aggressive marketing or discounting campaigns the supermarket behemoths introduce, it is the customer who has the final decision".

Meanwhile, a report today said that Britain's high streets are in the grip of their worst summer for six years.

Shoppers were holding back on spending amid uncertainty over interest rate rises - tipped to go up at the end of this year or the start of 2016 - according to the BDO High Street Sales Tracker.

It recorded a 1.1% drop in year-on-year sales for July, which means sales have fallen each month since May for the first time since 2009.

Belfast Telegraph

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