Knocking on the door of the Big Four: Aldi becomes fifth-biggest grocer

Aldi, the German-owned discounter, has overtaken the Co-operative as Britain’s fifth biggest supermarket, industry data released today (Februsry 7) shows.

Aldi’s sales rose 12.4% year-on-year in the 12 weeks to 29 January, taking its market share to 6.2% and ahead of the Co-op’s 6%, according to research firm Kantar Worldpanel.

It underlines the challenge the big retailers have faced from discounters such as Aldi and its German rival Lidl (whose sales rose 9.4%, taking its market share to 4.5%).

“Underpinned by an extensive programme of store openings, the past quarter has seen Aldi attract 826,000 more shoppers than during the same period last year,” said Fraser McKevitt, head of retail and consumer insight at Kantar Worldpanel.

Ten years ago ago Aldi was only Britain’s 10th largest food retailer, accounting for less than 2% of the grocery market. When it first arrived in the UK in 1990, it was confined to a few recession-hit strongholds in the North of England.

Now it is fashionable with the metropolitan middle classes, and is opening its 700th store this month – and plans a further 300 this year.

However, the more it tries to offer its customers, in terms of range and in-store experience, the greater the danger that it strays from its low-cost, limited range business model which has proved so effective.

Despite being overtaken by Aldi, Co-op’s 2% sales increase was well ahead of the market, continuing a run of growth stretching back to July 2015.

Mr McKevitt said: “A significant own label sales increase of 7% was behind [Co-op’s] strong performance, with healthier ranges successfully catering to consumers’ good intentions for the new year.”

Tesco remains the clear leader with more than 28% of the UK market. Its sales rose 0.3% over the 12-week period, which included the busy Christmas season.

Sales were flat at Sainsbury’s (which now owns Argos), while Asda’s declined 1.9%. Morrison’s, whose founder Sir Ken Morrison died this week, posted an impressive sales spike of 1.9%, gaining market share for the first time since 2015.

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