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Time for supermarket celebrations? Not yet Time for supermarket celebrations? Not yet
(7 months later)
So, party poppers all round for Tesco, Sainsbury’s and Morrisons: they had a far merrier Christmas than predicted.So, party poppers all round for Tesco, Sainsbury’s and Morrisons: they had a far merrier Christmas than predicted.
Deals on alcohol and vegetables, together with enough staff to keep the queues down and shelves full, meant all three grocers improved their sales performance in December. Shares in the three chains jumped up on hopes that they might finally have found a way to fight back against Aldi and Lidl.Deals on alcohol and vegetables, together with enough staff to keep the queues down and shelves full, meant all three grocers improved their sales performance in December. Shares in the three chains jumped up on hopes that they might finally have found a way to fight back against Aldi and Lidl.
Related: Retail Christmas: the winners and losers in the UK
But Morrisons’s, Sainsbury’s and Tesco’s Christmas sales figures were only a surprise to those who had read the latest market share data too simplistically. The closely watched figures, from Kantar Worldpanel, monitor trends in total sales. As the big chains closed shops, total sales fell and improvements in those still trading were masked. The pace of growth also appears to have slowed at Aldi: it is possible the German discounter’s core estate recorded no sales growth at all in December.But Morrisons’s, Sainsbury’s and Tesco’s Christmas sales figures were only a surprise to those who had read the latest market share data too simplistically. The closely watched figures, from Kantar Worldpanel, monitor trends in total sales. As the big chains closed shops, total sales fell and improvements in those still trading were masked. The pace of growth also appears to have slowed at Aldi: it is possible the German discounter’s core estate recorded no sales growth at all in December.
But maybe the party poppers are little premature: the discounters are far from on the ropes. The slowdown in growth at Aldi’s established stores is unsurprising when the car parks are overflowing and there are queues at the checkout. Lidl, meanwhile, is still increasing sales at established stores as it attracts more middle-class shoppers.But maybe the party poppers are little premature: the discounters are far from on the ropes. The slowdown in growth at Aldi’s established stores is unsurprising when the car parks are overflowing and there are queues at the checkout. Lidl, meanwhile, is still increasing sales at established stores as it attracts more middle-class shoppers.
Both have ambitious opening plans. Aldi will open 83 stores this year as it targets 1,000 outlets by 2022. Lidl is opening up to 50 a year. The new stores will only ramp up the German chains’ purchasing power and market share.Both have ambitious opening plans. Aldi will open 83 stores this year as it targets 1,000 outlets by 2022. Lidl is opening up to 50 a year. The new stores will only ramp up the German chains’ purchasing power and market share.
And then there is Asda. It appears to be losing sales at a quite spectacular rate: the suggestion is a 3.5% slide over Christmas. The problem is that having made its brand all about price, Asda is now struggling in a world where Aldi and Lidl are cheaper.And then there is Asda. It appears to be losing sales at a quite spectacular rate: the suggestion is a 3.5% slide over Christmas. The problem is that having made its brand all about price, Asda is now struggling in a world where Aldi and Lidl are cheaper.
Until now, Asda has prioritised profits over sales. But it has already signalled a plan to step up price cuts this year. If it decides to take on the discounters even more aggressively, then the other big three will have to respond – and trade could get tougher than ever.Until now, Asda has prioritised profits over sales. But it has already signalled a plan to step up price cuts this year. If it decides to take on the discounters even more aggressively, then the other big three will have to respond – and trade could get tougher than ever.