It was more a matter of when rather than if Aldi would become the UK’s fifth largest grocer (confirmed today in Kantar’s latest UK market share data).
Its space development alone has guaranteed momentum behind its market share growth – and, in addition, the retailer has benefited as the appeal of its proposition has broadened and basket sizes have crept up. Based on our analysis, we fully expect the retailer’s influence in the market to grow further.
Consider first that, while the retailer’s rate of growth has slowed, it is building on an increasingly large sales base – so the cash it’s taking from competitors’ tills is substantial.
Second, there remain large pockets of the UK that are under served by Aldi. It can still open many new stores without cannibalising the sales of existing shops.
Third, Savvy’s own research tells us that Aldi shoppers shop more categories at the retailer as they use it longer. As such there is growing scope to drive basket spend among newer (often more affluent) shoppers.
Finally, as we enter a period of economic uncertainty, Aldi and Lidl are both well placed to benefit. Higher inflation will sharpen shoppers’ minds when it comes to value – indeed 66% of shoppers tell us they expect Aldi and Lidl will benefit as a result of Brexit.
So while the pace of Aldi’s development may have slowed significantly over the past year, it still has a strong growth story to tell. There is certainly no reason for its rivals to feel any sense of relief yet.