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Lidl continues to spend big on advertising as sales volumes fall

Lidl has been the biggest spender on TV and press advertising for the sixth consecutive month against a backdrop of falling sales volumes across UK supermarkets.

Lidl's most recent campaign took a swipe at FMCG suppliers as it pitted the quality of its own-brand products against branded goods. According to Neilsen, tor the four weeks ending 15 August 2015, Lidl backed the campaign with a £3.7m spend on TV and press advertising, a 261 per cent increase from the same period last year.

The extra investment appears to be paying off, as it noted a 9.5 per cent year-on-year increase in the number of shoppers to over 850,000 extra people.

Tesco meanwhile put £3.5m behind its marketing plans while Aldi spent £3m.

Iceland was recently lauded as one of the best performing supermarkets in the UK over the past quarter, bucking the trend of declining sales to achieve a 3.4 per cent increase according to the latest Kantar Worldpanel data.

This boost can be attributed to a 616 per cent year-on-year leap in marketing spend to £1.1 million as the frozen food seller continues to promote its premium and speciality ranges.

“It’s interesting to see there’s also been a movement away from price-based messaging in TV and press ads,” noted Nielsen’s UK head of retailer and business insight Mike Watkins. “In a renewed attempt to gain market share, retailers are starting to differentiate themselves by highlighting their range and service credentials – not just lower prices and value for money, which are fairly homogenous offerings in times of price deflation.”

The ballooning spend comes against a general backdrop of falling sales volumes. The number of items purchased from the UK’s leading supermarkets fell by 0.3 per cent year-on-year for the first time since early December 2014.

The bulk of the loss was attributed to a decline in soft drinks, frozen foods and general merchandise.

Meanwhile, the value of sales at the tills fell 1.1 per cent, the fourth decline in the last five periods.

“The disappointing growth figures reflect the continuing unpredictable summer weather as well as the underlying deflation in retail prices,” added Watkins. “The week ending 25 July suffered from particularly poor weather with the value of sales down 3.6 per cent against the same period last year, which was notably warmer and included the start of the Commonwealth Games.”

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