Explore the best creative works

Consumers will continue to switch to Lidl and Aldi despite boost to personal finances, finds Nielsen

Consumers will continue to favour discount supermarkets, despite growing confidence in the British economy, and more people feeling positive about personal finances, according to Nielsen’s UK Consumer Confidence Index.

Confidence levels grew for the fourth consecutive quarter, five times faster than the global average in 2014, and hit an eight-year high of 94 points (on a scale where 100 or above represents confidence).

The feeling among 42 per cent of 30,000 consumers surveyed was that now is a good time to make purchases while 45 per cent are positive about their personal finances.

Despite this, there was an increase in households which still intend to switch to cheaper grocery brands even when economic conditions improve – up from 37 per cent in 2013 to 45 per cent in 2014.

Nielsen’s UK head of retailer and business insights Mike Watkins said that although consumer confidence is back to pre-2008 financial crisis levels, people will continue to switch to discounters such as Aldi and Lidl to save on household expenses.

“With the discounters now having a 10 per cent share of grocery sales and supermarkets lowering prices, it looks like shoppers will habitually continue to spend less on groceries, even when their personal finances improve.”

The Nielsen research will not be welcomed by Tesco, Asda, Morrisons and Sainsbury’s which have all ploughed millions into price-cut strategies for the coming year in a bid to stay competitve.

According to Kantar Worldpanel’s latest figures, the ‘Big Four’ continue to see their marketshare of the grocery sector eroded by discounter rivals.

Tesco's market share was down to 29.1 per cent in December 2014, from 29.6 per cent a year previous. Asda dropped to 16.8 per cent from 17.1 per cent in 2013, while Morrisons went from 11.5 to 11.3 per cent, and Sainsbury’s fell from 17.1 to 16.1 per cent.

Meanwhile, Aldi increased its share from 4.0 to 4.8 per cent in 2014 while Lidl saw a 0.4 per cent boost from 3.1 per cent in 2013.

By continuing to use The Drum, I accept the use of cookies as per The Drum's privacy policy