Emma Bedford
Senior Team Lead Food & Agriculture
Discount supermarkets in the United Kingdom - statistics & facts
The UK grocery market is undergoing a significant transformation, with discount supermarkets like Aldi and Lidl reshaping the competitive landscape. These German retailers have gained impressive market share and become more popular than some traditional British supermarket chains. A recent comparison of shopping baskets containing 55 items revealed significant price disparities and one reason why shoppers are turning to discounters; Aldi and Lidl offer the lowest costs at 97.89 British pounds and 98.34 British pounds, respectively. The third cheapest supermarket and market leader, Tesco, would cost shoppers an extra ten British pounds.
As inflation stabilizes and prices for day-to-day supermarket essentials continue to grow at a slower rate, it is yet to be seen if shoppers will stick with their discount supermarket of choice or switch back to their old favorites. To win back consumers, more traditional supermarkets should work on incentives to bring shoppers back, namely loyalty programs, expanding affordable private label offerings, and competitive prices overall.
Aldi and Lidl: UK's budget-friendly favorites
Aldi and Lidl have established themselves as popular budget-friendly supermarket chains in the UK, with both enjoying high brand awareness among grocery store customers at 95 percent. Aldi appears to have a slight edge in popularity, with 52 percent of UK grocery store customers saying they like the brand, compared to 44 percent for Lidl. This preference is also reflected in usage, as 51 percent of consumers use Aldi, while 43 percent use Lidl. In the fourth quarter of 2024, Aldi and Lidl, along with M&S Food, topped another ranking as the most popular supermarket chains in the UK, with 78 percent of respondents having a positive opinion of these retailers. This puts them ahead of more established names like Sainsbury's and Tesco, which were popular with 74 percent and 72 percent of those polled, respectively.Increasing food prices shape the UK grocery market
Extremely high sales growth figures for the two key discounters went hand-in-hand with the inflation rate for food in the UK. March 2023 marked the peak for food inflation when prices increased by 19.1 percent compared to 2022. This figure has since dropped to 1.9 percent in October 2024, meaning that price growth has slowed but is still ongoing. During the period of the highest food inflation in March 2023, both Aldi’s and Lidl’s sales grew by just over one-quarter when compared to the previous year. Lidl has still experienced impressive growth, with sales increasing by 7.4 percent in the 12 weeks ending November 1, 2024. Aldi's sales grew by 1.3 percent in the 12 weeks ending September 1, 2024.Changes in the supermarket leaderboard
The discounters are not only increasing their sales but also expanding their market presence. Lidl is the sixth largest supermarket in the UK, commanding a 7.7 percent market share as of November 2024. Even more notably, Aldi overtook Morrisons to claim the fourth-largest market share in September of 2022, where it has remained since. Aldi has sustained a double-digit market share since April 2024 and Lidl is poised to take over fifth place from Morrisons in the near future, with just 0.9 percent market share lying between the two. This trend is further evidenced by the fact that in 2022, approximately 63 percent of all new supermarket openings were discount or value brands, with this figure rising to 74 percent by mid-2023.As inflation stabilizes and prices for day-to-day supermarket essentials continue to grow at a slower rate, it is yet to be seen if shoppers will stick with their discount supermarket of choice or switch back to their old favorites. To win back consumers, more traditional supermarkets should work on incentives to bring shoppers back, namely loyalty programs, expanding affordable private label offerings, and competitive prices overall.
