‘Big Four’ change tactics as Lidl and Aldi continue to disrupt the market
Anisha Basra, Nottingham 19/12/18
Current Affairs Society, University of Nottingham
Losing ground, Sainsburys, Asda, Morrisons and Tesco revise their strategies in a run up to what is forecasted to be, a record-breaking festive period.
German discounters Aldi and Lidl continue to bite at their larger, more established rivals with a 12.2%, and 11.2% expansion of market share respectively, a report from Kantar Worldpanel reveals.
With Christmas Day falling on a weekday, “grocers have an extra trading day this year meaning overall sales in December-up to and including Christmas Eve – could reach £10bn” says Kantar’s Fraser McKevitt. It is hence crucial for the grocers to revise their strategies in the run up the festive battle.
This is further aided with shoppers being welcomed with a fall in grocery price inflation, from 3.2% to 1.6%. For this reason, consumer confidence is on the high with premium own-label lines growing at 5.5% which could potentially lead to “record sales in this price tier of £1.1bn over the 12-week period."
It is no wonder that Morrisons has introduced more products to its ‘Best Premium Range.’
The supermarket is also looking to attract new customers with the launch of a new vegan range and children’s brand called ‘Little Kitchen’ next week. This is expected to lure in new customers and gain loyalty via their new Morrisons More App which enables users to collect loyalty points and receive exclusive offers. This is in addition to them expanding their wholesale supply, with supermarket giant, Tesco, also doing the same.
“In a very competitive market place, investors in the group will be hoping that it can entice some new shoppers through its doors in the run up to Christmas,” said Graham Spooner, investment research analyst at The Share Centre.
However, despite Morrisons having already delivered a 0.5% increase in sales, it saw a decline in market share of 0.1% whilst Tesco PLC suffered 0.1% decline in sales and 0.6% decline in market share compared to the same period a year ago.
With Asda agreeing to be taken over by J Sainsbury PLC, and it being the only supermarket among the ‘Big Four’ to maintain market share at 15% in the period alongside a rise in sales of 1.5%, it will be interesting to see how well the large supermarkets perform against each other, and alongside the rising threat of the German discounters, ready to steal customers away with their irresistibly low prices.
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