No-frills Aldi overtakes middle class Waitrose in sales

No-frills discounter Aldi has just won a big victory in the British supermarket wars, overtaking sales of Waitrose, the retailer beloved by middle class shoppers.

Half a million new shoppers have walked through Aldi's doors so far this year giving the supermarket a 5.3 per cent share of the UK market compared to Waitrose's 5.1 per cent, Kantar Worldpanel said.

The data highlights the growing strength of discount chains that have led the recent deflation in grocery prices and played havoc with the big four supermarkets, who are struggling to achieve sales growth amid an intensifying supermarket price war.

The German chain is now the sixth-largest grocer in Britain. Its discount rival Lidl has also been building share and together they account for 9 per cent of the UK market despite the economic recovery, with the big four supermarkets holding a 72.8 per cent share, the lowest level in a decade, Kantar said.

The 'cheap-and-cheerful' chains are retaining their grip on middle-class consumers who may not have previously considered themselves discount shoppers, by delivering not only on price, but also surprising on quality, an analyst said.

"It's largely low prices that get people through the door, but it's the quality that brings them back again and again," said Richard Hyman, an independent retail analyst.

However, he added that achieving double-digit growth would get progressively more difficult for the discounters as the big four supermarkets begin to respond more effectively to the threat, but that the market share ceiling for Aldi and Lidl was still some way off. "There is plenty of steam left in there," said Mr Hyman.

Aldi's sales increased 16.8 per cent in the 12 weeks to March 29, Kantar's data showed, but that is a slower pace than the previous period when it recorded a 21.2 per cent rise.

Tesco, WM Morrison, J Sainsbury and Asda have all suffered at the hands of the discount chains, who are able to use their Europe-wide purchasing power to undercut their rivals.

However, UK consumers have benefited from their growth, which has forced the middle-market supermarkets to cut their prices in an effort to remain competitive.

Groceries are now 2 per cent cheaper than they were a year ago, according to Kantar, with grocery price inflation at its lowest level since the market research company began records in 2006.

Despite losing its sixth-place position to Aldi, Waitrose was still able to increase its market share in the period, with sales up 2.9 per cent, continuing an unbroken chain of sales growth since March 2009.

Lidl grew at a double-digit rate, with sales rising 12.1 per cent, helping to drive its market share to 3.7 per cent.

Sainsbury returned to sales growth for the first time since August 2014, recording a 0.2 per cent rise in sales. Last month, Mike Coupe, chief executive, said the supermarket was beginning to see the "green shoots" of a recovery.

Tesco was up 0.3 per cent, its third period of sales growth but a significant slowdown on the 1.1 per cent growth reported by Kantar in March.

Sales at Asda fell 1.1 per cent, while Morrisons saw a 0.7 per cent drop.

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