Supermarkets Ramping Up Promotions; Aldi Achieves Record Market Share

According to the latest data from Kantar, take-home sales at UK grocers increased by 1.8% over the four weeks to 23 March compared with a year ago, marking the slowest rate since June 2024. Grocery price inflation rose slightly to 3.5% over the same period, with shoppers turning to promotions to save money.

“With prices continuing to rise, supermarkets are mindful of the need to invest to attract shoppers through their doors,” said Fraser McKevitt, head of retail and consumer insight at Kantar. “Promotional sales ramped up this month to 28.2% of total grocery spending, the highest level we’ve seen in March for four years.”

The data shows that retailer price cuts were responsible for £2.6bn of promotional spending, 8.8% more than the same time last year and significantly higher than the £686m spent on multibuy deals and ‘extra free’ offers. McKevitt added: “Despite the recent surge, we’re still some way off the promotional records hit in the wake of the financial crisis. Average spending on deals in 2012 was 39.8%, meaning there could still be more headroom to go. However, the market has changed a lot in that time, with the discounters holding a far higher share today than they did 13 years ago.”

Kantar noted that retailers battling to deliver value will be welcome news for households who remain worried about their financial situation. A recent survey by the research firm found that while the number of people reported as financially struggling has fallen from its peak of 27% in October 2022, this still accounts for almost a quarter (22%) of the country. “The rising cost of groceries ranks third on the list of concerns keeping consumers awake at night, just behind energy bills and the country’s overall economic outlook,” said McKevitt.

Despite financial concerns, consumers are still finding ways to treat themselves. Last month, sales of chocolate eggs and seasonal confectionery reached £134m, and over a third of households bought hot cross buns, even though Easter isn’t until late April.

As Aldi prepares to celebrate the 35th anniversary of its first store opening in the UK on 5 April, its share of the grocery market hit 11.0% for the first time over the 12 weeks to 23 March. This was up 0.3 percentage points from last year after its sales grew by 5.6% – the fastest rate for the discounter since last January.

Lidl’s sales rose by 9.1%, taking its market share to 7.8%, 0.4 percentage points higher than a year ago. It attracted 385,000 more shoppers last month, more than any other grocer, and saw a double-digit rise in footfall.

Ocado was again the fastest-growing grocer, a position it has held for the last 11 months, after its sales increased by 11.2%. For the first time, the online retailer took a 2.0% portion of the market. Spending on groceries at M&S increased by 13.1%, on top of M&S goods sold through Ocado.

Tesco saw spending through its tills rise by 5.4%, nearly half a billion pounds more than the same period a year ago. The UK’s largest grocer made the biggest share gain, with its portion climbing from 27.3% to 27.9%. Sainsbury’s reached 35 consecutive periods of year-on-year growth, with sales up by 4.1% as it grew ahead of the market. Its share nudged up to 15.2%.

Despite its turnaround efforts, sales at Morrisons were up only 0.6%, and its market share slipped to 8.5%. Meanwhile, Asda’s price rollback campaign appears not to have yet had a significant impact on its performance, with its market share declining to 12.5% after a 5.6% fall in sales.

NamNews Implications:

• The key standout is the Tesco-Sainsbury’s-Aldi-Lidl growth in market share, largely at the expense of Asda and Morrisons.
• Moreover, increases in sales performance across the board is being ‘bought’ via price promotion.
• With possibly more of the same as Autumn Budget tax increases now begin to bite in April.
• Suppliers need to anticipate the probability that retailers will now want (need?) them to share some more of the promo-cost of encouraging uncertain shoppers to spend.
• Any reluctance by brand owners runs the risk of more consumers turning to own label alternatives…

Growth Accelerates At Discounters And Market Leaders But Morrisons And Asda Continue To Struggle

 Kantar: take-home sales UK’s Mults up 3.6% (4 weeks to 23-2-2025, weaker than the 4.3% of the previous month), promos kept price inflation at 3.3%.

Items bought on offer = 27.6% of sales, up 0.3 percentage points vs 2024. Premium own-label up 13.3% this month.

In the 12 weeks to 23 Feb, Ocado was the fastest-growing retailer for the 10th consecutive month, spending up by 9.6% at 1.9% market share.

M&S grocery sales up 12.2% in bricks & mortar stores.

Aldi had 377,000 more shoppers, a 10.3% share, sales up 4.9%, highest since Jan 2024.

Lidl market share up to 7.3%, sales up 8.1% vs 2024.

Morrisons’ share down to 8.6%, store sales flat vs 2024.

Asda sales down 5.0%.

Five years since first Covid-19 UK lockdown in the UK, Kantar outlined how consumers’ grocery habits have evolved since then.

Sally Ball, Kantar head of retail: “Back in 2020, we didn’t know just how big an impact the Covid-19 pandemic would have on our lives, but five years on we can get a picture of its lingering effects on consumers.

"We haven’t gone back to old patterns and shopping trips remain below pre-pandemic times. Households made one less visit to the supermarket in February 2025 than in 2020, while online shopping appears to have stuck, taking a 12.3% market share this month versus 8.6% in February 2020.

“...consumers have moved to simpler eating habits (convenience), taking less time to prepare meals, and prep time in the evening, for example, has declined from almost 34 minutes in 2020 to 31 minutes in 2024.”

Kantar consumption data:

People now using fewer different ingredients when making food (lunch and evening). Consumers snacking less often, dropping over 330m occasions in 2024 versus 2020.

Ball added: “Of course, it’s hard to untangle the cost of living crisis from any post-Covid analysis, and the other big headline of the past few years has been consumers’ hunt for value. You might think that people would shop around more to find the best deals but in fact, that’s not the case.

"Households visited just under five different grocers this month, the lowest level in February since 2021. The growth of supermarket loyalty schemes is partly behind this as shoppers use them to unlock exclusive discounts.”

NamNews Implications:

• The key standout has to be the growing shares of Tesco, Sainsbury’s, Aldi and Lidl…
• …at the expense of Asda and Morrisons.
• Causing us to wonder if there is any way back for Asda and Morrisons?
• The other issue has to be the unprecedented impact of Lockdown on businesses everywhere…
• Resulting in the dilution of consumer belief in ‘everything’.
• Causing consumers to view with suspicion the size of the brand premium when private label ‘substitutes’ were found not to be as much of a compromise as anticipated.
• Begging the question: How much will brands have to spend to win back loyalty?

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Tesco And Lidl Remain Top Performers As Discounts Drive Growth

Latest data from Kantar shows that take-home sales in the grocery sector rose by 4.3% over the four weeks to 26 January as supermarkets ramped up discount activity to attract cash-strapped shoppers after the costly Christmas period.

This also helped drive down grocery price inflation from 3.7% in December to 3.3% during the opening weeks of 2025 at a time when retailers are warning they may have to increase prices later this year to offset the hikes in employer national insurance contributions and the minimum wage. In January, prices rose fastest in categories such as chocolate confectionery, chilled smoothies & juices and butters & spreads, while they fell fastest in ambient cooking sauces, household paper products and cat food.

Spending on promotions during the four weeks rose by £274m year-on-year, accounting for 27.2% of sales – the highest level in January since 2021. Fraser McKevitt, head of retail and consumer insight at Kantar, noted that people also turned to non-branded products to help keep costs down, with own label as a proportion of sales hitting a record high of 52.3% in January. Spending on supermarket own label lines was up 5.4%, boosted by consumers buying premium products in days leading up to New Year’s Eve.

Meanwhile, the Kantar data confirmed that shoppers started the new year with a focus on wellness and health. More than 10% of the average consumer’s January grocery bill was spent on fresh fruit, vegetables and salad, totalling £1.2bn – £193m more than in December. Nathan Ward, business unit director for usage and out-of-home at Kantar, commented: “Rolling into the new year, health tends to play a bigger role in our grocery choices. Over a quarter of take-home food and drink in January is chosen with health at least partially in mind, as shoppers tell us they want to eat less processed food and feel the benefit of fibre and vitamins.”

Protein products also pulled their weight at the tills as demand for bars, bites, and drinks boosted spending on sports nutrition products. Sales for this category at supermarkets were 47% higher than last year, with over two million households buying these items during the month.

Sales of low and no alcohol drinks were 7% higher than last January, and 6.7% of households bought at least one of these alternatives. McKevitt said: “It’s no surprise to see the low and no alcohol trend make its mark in January, but given some of the generational splits we have seen in grocery, it’s interesting that older shoppers are just as likely to take these products home as younger ones. Not everyone signed up for dry January though, with 49% of people buying an alcoholic drink this month – but this is a pretty big drop from December’s 76%.”

Looking at the performance of individual retailers, sales at Lidl rose 7.4% over the 12 weeks to 26 January, making it three continual years of growth for the discounter, whose market share now stands at 7.2%. Aldi’s growth accelerated for the third consecutive month, with sales up 4.2% and its market share increasing to 10.2%.

Tesco gained the most share, with its 28.5% hold of the market now 0.7% higher than this time last year after seeing its fastest rise in sales since April 2024 at 5.6%. Sainsbury’s also outpaced the market with sales growth of 4.2% and an increase in share from 15.7 to 15.9%.

Despite an upbeat trading statement last week, sales at Morrisons were unchanged, and its market share slipped to 8.6%. Asda continued its dismal run, with its sales sliding 5.2% ahead of last week’s launch of a major Price Rollback campaign aimed at kick-starting its recovery.

Ocado was the fastest-growing grocer for the ninth consecutive month. Spending at the online retailer grew by 11.3%, meaning it now holds 1.9% of the market.

Meanwhile, M&S, whose higher proportion of clothing and general merchandise in its sales mix means it does not fall under the definition of ‘grocers’ using the research group’s Till Roll methodology, saw its grocery sales increase by 10.5% in its bricks & mortar stores.

NamNews Implications:

• Brands promoted in January to pull back share from own label.
• (Possibly a continuing issue as retailers raise shelf prices in anticipation of Autumn Budget Tax increases)
• Retailers themselves may choose to reverse the brand/own label balance to 50/50…
• …to increase the appeal to brand owners as retail media grows.
• Tesco’s growth exceeding the grocery market continues to impress…
• While Aldi & Lidl’s rate of growth and increase in share has to be of concern to rivals.
• Meanwhile, the growth of the mults and discounters, largely at the expense of Asda and Morrisons…
• …has to add to the comeback pressures each.

Supermarkets Fastest Growth In Five Months - Source & Impact?

Taking the latest results from Nielsen and Kantar, it is encouraging that some of the mults appear to be coming back (possibly at the expense of other multiples?)…no-one ever wanted these guys to fail, and besides so much of the supplier business model is built upon growth and the mults having a major slice of the action.

However, brand-owners might usefully think about the split between brand and private label of the market data. Add to this the high rate of discounter market share growth, again at the relative expense of brands’ demand and a different picture of recovery emerges..

All pointing to the fact that brand premia are being eroded, hopefully triggering a return to basics, real basics, by the realists…