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Lidl's share grows by quarter as big supermarkets suffer

By John Mulgrew

Published 29/09/2015

Lidl unveiling its first Belfast city centre store last year. At the opening were (from left) sales operations executive Paul Gibson, the then Lord Mayor Nichola Mallon and actress Bronagh Waugh
Lidl unveiling its first Belfast city centre store last year. At the opening were (from left) sales operations executive Paul Gibson, the then Lord Mayor Nichola Mallon and actress Bronagh Waugh

German retail giant Lidl's continued rapid market grab from the big supermarkets has been branded the "stuff of fairytales" - growing by a quarter in the space of a year.

The chain's share of the supermarket sector in Northern Ireland increased by more than 24% in the year to September 13.

And it's both Tesco and Sainsbury's which are continuing to be impacted by the rise of the discounter.

Sainsbury's saw customer sales drop by 2.8%, year-on-year, while Tesco suffered a 1.2% fall in the same period.

While Asda, which operates 17 stores in Northern Ireland, increased its sales by 1.8%.

Lidl's market share looks to increase further still as it is set for further expansion in Northern Ireland. Earlier this year the Belfast Telegraph reported the supermarket had earmarked between 10 and 15 new stores here.

It is set to open 60 stores across Ireland.

The expansion would make Lidl the biggest supermarket here - bringing its store numbers to more than 50.

Lidl's continued success story is down to its "extreme strength in being able to convince consumers that they are offering quality products at affordable prices while they continue to trade-up in terms of their choices", according to Ulster University Business School retail analyst Donald McFetridge.

"The Lidl success story seems to be the stuff of which fairytales are made. Their trading results and market growth continue to outpace even their nearest competitors in the retail marketplace," he said.

"The Lidl consumer is no longer the bargain basement shopper of yesteryear. Instead, the middle-classes have caught on to the fact that Lidl offers a limited but formidable range of products in certain categories which are simply not available elsewhere in what are considered to be the premium supermarket chains."

Across the UK, both Lidl and Aldi have enjoyed three months of booming growth as more than half of British households visited at least one of the stores.

"The middle classes are dashing to their outlets in search of bargains, but these days they're not disguising their visits with Sainsbury's or Marks & Spencer re-usable shopping bags," Mr McFetridge said.

"In the meantime, Tesco and Sainsbury's are having to work harder and harder in their efforts to retain their formerly loyal customer base."

But Lidl ruffled a few feathers earlier this month, after it was revealed Northern Ireland workers were set to lose out on a pay rise given to workers in Great Britain.

The supermarket will pay a minimum of £8.20 an hour across England, Scotland and Wales and £9.35 an hour in London from October 1, benefiting 53% of its 17,000-strong UK workforce.

But its 600 Northern Ireland staff will not benefit, as its operation here is separate.

In response, a spokesman for Lidl said: "Lidl NI, which operates independently of Lidl GB, currently offers attractive wages for all staff members.

"These wages are reviewed annually and as such in August 2015 Lidl NI increased the hourly wage paid to staff, to ensure they were in line with the proposed living wage for Northern Ireland."

Meanwhile Lidl's big competitor elsewhere in the UK - Aldi - has said there are no plans on the horizon for stores in Northern Ireland. It has outlets in England, Scotland, Wales and the Republic, but still says it has no immediate plans to begin operating here.

It comes as the discount retailer reported a fall in profits yesterday as the supermarket price war took its toll on earnings despite sales surging to a new record level.

Belfast Telegraph

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