Aldi roars in with higher sales and profits – how will Tesco and Sainsbury fight back at Christmas?

More evidence has emerged, if any more is needed, of the havoc being wreaked on the UK supermarket majors by the German discounters.

565a54ee-2be7-4d32-9291-14cc6bb86f2c.imgFollowing hard on the news of Tesco’s missing £250m, Aldi has announced that its UK sales rose from £3.89bn to £5.27bn in 2013 as it expanded its range and attracted more middle class shoppers. Pre-tax profits rose 65 per cent to £261m.

Which still leaves Aldi, and its German buddy Lidl, way behind Tesco and Sainsbury but the gap is narrowing rapidly.

Aldi’s like-for-like sales rose a boggling 30 per cent in stores open at least a year while Tesco’s are down six per cent and even Sainsbury, which was supposed to have avoided the worst of the price wars, is down four per cent. Aldi also claims that its shoppers put more items in their baskets and trolleys than Tesco’s do, which is pretty alarming for the biggies as one of their supposed advantages is that they stock far bigger ranges. They do have lots of smaller convenience stores though.

Christmas, of course, is the biggest time for all the supermarkets and this year’s contest will be more interesting than ever. Aldi, with McCann Manchester, and Lidl with TBWA, can be expected to try to push home their advantage.

Oh to be a fly on the wall at Wieden+Kennedy, which handles Tesco, and AMV/BBDO, which has Sainsbury. Rivals Morrison and Asda will be pushing price, no doubt. Can Tesco, Sainsbury and their agencies come up with a more compelling proposition?

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About Stephen Foster

Stephen is a former editor of Marketing Week and London Evening Standard advertising columnist. He wrote City Republic for Brand Republic and is a partner in communications consultancy The Editorial Partnership.

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