Lidl’s £78m ad spend seals ‘fastest growing grocer’ title as Big Four fightback continues
Lidl has held on to its ‘fastest growing supermarket’ crown, increasing its sales by 17.7 per cent to capture 4.4 per cent of the market according to the latest Kantar Worldpanel figures covering the 12 weeks to 27 March.
The seemingly unencumbered growth of the German discounter was driven in part by a massive £78m investment in marketing last year – almost double what it previously spent. According to data from Ebiquity, published by The Grocer, Lidl is now the UK retailer with the biggest traditional media budget after increasing its marketing budgets over the three consecutive years.
Ronny Gottschlich, Lidl UK’s chief executive said the last quarter has been one of its most successful trading periods, processing some 40 million customer transactions in the four weeks leading up to Easter.
“Lidl has become the supermarket of choice both for the regular shop and the most important meals of the year for an increasing number of British consumers,” he said.
"To meet customers’ strong and fast-growing appetite for our 'best quality for the best price’ offering, we are strategically investing in both store refurbishment and new openings as well as the introduction of fresh and exciting products. We now have 630 stores in the UK and are on track to open up to 50 more by the end of the year.”
Hot on its heels is main rival Aldi – which spent £62.5m on advertising last year – which grew sales by 14.4 per cent to reach a new record-high market share of six per cent.
By contrast the Big Four – Tesco, Asda, Morrisons and Sainsbury’s – have all drastically cut their marketing budgets, in part due to almost every grocer shaking up its marketing team in the past 18 months.
Despite massive efforts to reposition the brands, Tesco and Asda have both shed budgets by 19 per cent to £64m and £77m respectively, while Morrisons - in the midst of an overhaul - has cut its marketing spend by 35 per cent to £44.7m.
Tesco, Asda, and Morrisons have all continued to see sales fall, although not as dramatically as in previous quarters. For the fourth month in a row Tesco’s decline lessened, with sales now down by only 0.2 per cent year-on-year. It’s yet to stem its market share loss, which was down by 0.3 percentage points to 28.1 per cent.
It was a similar story for Morrisons; while improving on last month it still saw sales fall by 2.4 per cent. Market share also decreased by 0.4 percentage points to 10.5 per cent.
However, it was Asda that felt the biggest slump in sales, which were down almost four per cent over the quarter.
In contrast, Sainsbury’s, which has scaled back multi-buy promotions to great effect as recently claimed by its chief exec, was buoyed by a sales increase of 1.2 per cent. It has not been as quick to weild the axe on marketing, although it has reduced its spend by almost eight per cent to £55.6m.