COVENTRY MESSAGE BOARD

Aldi and Lidl as well as upmarket grocer Waitrose are expected to have gained market share



The discounters "won Christmas" with Aldi boosting sales by more than a third in the three months to 5 January, according to analysts, as major grocers Tesco and Sainsbury's are expected to reveal lacklustre sales figures this week.

Aldi, Lidl and Waitrose are all expected to have won market share while Tesco is likely to have been the biggest loser, according to analysts at Bernstein, who predict the UK's biggest supermarket chain's share of UK spending on groceries would drop nearly 1% in the 12 weeks to 5 January.

In contrast it predicts sales at Aldi rose 35.9% to increase its market share by 1.1 percentage points to 5.3% over the same period, while Lidl increased its sales by 17.4%, taking its share to 3.6%.

German chain Aldi said it had its busiest Christmas since arriving in the UK 24 years ago, with its fresh lobster tails, free range turkey and luxury mince pies all proving festive hits. "People are shopping with us because we save them money every week and because they like the quality of what Aldi offers," Aldi said.

Lidl also said it had enjoyed its best ever Christmas performance – it sold out of fresh turkeys on Christmas Eve and its Comte de Brismand Champagne was its top-selling product. The company, which has 600 outlets in the UK, said it was planning to open 16 to 20 more stores this year. "People are initially attracted by our low pricing strategy but it's the product quality that keeps them coming back," the company said.

It added that between 2011 and 2012, the proportion of more well-off "ABC1" customers coming through its doors rose from 25% to 41%.

Discounters have clearly benefited from shoppers' desire to save money over the recent downturn, but analysts predict that behaviour will not change as the economy improves and people have more money to spend.

"It used to be cheaper to shop in large stores, but the price gap with smaller stores has deteriorated – and discounters now offer comparable quality at lower prices. We cannot see consumers returning to behaviours they have rejected for the last several years," said Dave McCarthy, a retail analyst at HSBC.

Discount firms are not the only winners this Christmas. Upmarket grocers such as Waitrose and Marks & Spencer's food hall are also expected to have fared well, further pressuring the likes of Tesco, Asda, Sainsbury's and Morrisons.

"Tesco find themselves stuck in the middle, being squeezed from both sides by the discounters and the quality retailers, who have the more desirable distinctive retail offers. Tesco's strategy to deal with this, i.e. to move upmarket, is not working and they are continuing to lose market share," said Bruno Monteyne at Bernstein.

Waitrose reveals its trading figures on Wednesday, but has already said it saw sales jump 26.6% in the week to 28 December, although sales fell back in the previous week with more modest growth recorded before that. Meanwhile, Booths, the well-to-do northern supermarket chain, said that underlying sales rose 6% in the 21 days to 4 January.

"Customers care about quality and provenance at Christmas – they want to know they are buying the best, they want something exceptional to serve, made by someone who cares about the food they produce," said the Booths chairman, Edwin Booth.