Lidl’s sales in Great Britain jumped ۱۰% to more than £۱۳bn this year, as shoppers sought out cheaper fresh meat, fruit and vegetables and snapped up its Deluxe range.
Pre-tax profit at the German-owned supermarket’s arm in Great Britain grew by ۳۰% to £۲۴۵.۵m in the year ended in February, up from £۱۵۶.۸m in the previous year.
Shoppers have flocked to discounters such as Lidl amid rising food inflation, with in-store prices stepping up to an annual rate of ۱.۵% in August, up from ۰.۹% in July. Inflation for fresh produce remained high at ۳%.
Lidl said it had spent £۳۱۵m on price cuts and promotions such as its “pick of the week” product, while increasing numbers of shoppers were choosing its Deluxe upmarket food range.
“Deluxe sales are up ۱۲% as more households dine in rather than eat out,” the Lidl GB chief executive, Ryan McDonnell, said. “Customers are looking to trade up and treat themselves at home.”
This year Lidl beat Morrisons to become the fifth largest grocer in Great Britain, with its market share hitting ۸.۶% in the ۱۲ weeks to ۱۷ May, according to figures from the market analysts Worldpanel by Numerator.
That compared with an ۸.۳% share for Morrisons, which increased its sales by just ۱.۳% compared with a year earlier.
Aldi and Lidl have grown rapidly, thanks partly to slowing performance at Asda and Morrisons after both were acquired in debt-fuelled private equity deals.
However, Aldi’s growth has slowed recently as Tesco and Sainsbury’s have offered more savings via their loyalty schemes and ranges that match the German discounter on price.
Lidl said performance at its loyalty programme Lidl Plus had been particularly strong, with a ۲۳% rise in participants this year.
The analyst Clive Black, the vice-chair at the broker Shore Capital, said that was in contrast to Aldi “where management has a clear strategy to deride such programmes”.
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Aldi is the only big supermarket chain in the UK that does not operate a loyalty scheme.
This month the boss of Aldi UK, Giles Hurley, criticised some loyalty discounts that he said tricked customers by starting with “unrealistically high prices” that then dropped.
He told BBC News that discounts were helpful “when they’re real and when they show realistic reductions”, but criticised what he described as unrealistic reductions which “dupe customers”.
The UK’s competition watchdog investigated loyalty pricing schemes at supermarkets in ۲۰۲۴ and found that shoppers “almost always make a genuine saving”.
