Aldi sales soar at Tesco's expense

Aldo trolleysPA

It's a David versus Goliath battle. But let's avoid all reference to Philistines and Tesco. However Tesco is slowly being slayed by German minnows Aldi and Lidl. Aldi's sales are up a massive 25% alone in the last quarter. Tesco is losing market share.

No-frills tack

The no-frills German-based supermarkets are clearly winning consumers back. Aldi has returned from a grim 2009 with an operating profit of £18.7m on £2.1bn worth of sales. Contrast this with Tesco's fortunes. Its market share has slipped from 30.8% to 30.4%.

Not a huge fall, but given Tesco's sales record, it's significant. Especially when Aldi and Lidl have upped their combined market share from 5.3% to 6%. Put that in perspective - that's an almost 14% rise. A stunning achievement.

So Tesco this morning admitted to the City that its experienced the worst six months of UK trading for two decades. It is also facing some consumer scepticism over its recent Big Price Drop.

Promiscuous consumers

Industry magazine The Grocer surveyed a basket of 33 Tesco products recently and found they cost £1.34 more from Tesco. Tesco (and most other large supermarkets) are starting to learn that shoppers well, shop around; increasingly so.

Like this writer, who recently deserted Tesco on account of bad service. I flit from Morrisons to Lidl with occasional forays into Sainsbury's and Waitrose. Local independent fruit and veg shops in my part of East London are also cheaper than any of the large supermarkets, and I use them.

Behaviour like this is increasingly being adopted by many others. And as it becomes more ingrained... Well, that's Tesco's problem.
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