Christmas sales explode for Aldi

You either stick to everyday rock-bottom value or go decisively upmarket. Those appear the two winning formulas for UK retailers as made plain by Aldi - which has seen sales soar more than 30% in the 12 weeks up to Christmas - and Waitrose.

Indeed the two retailers increasingly exemplify a divided UK - rich and poor.

Aldi sees off Morrisons

The Christmas discounting didn't stop German cheapie Aldi offering goose and fine wine, likely to have boosted sales as UK shoppers decide whether to ditch middle of the road players like Morrisons, Tesco or Asda in exchange for a continental cheapie.

That value decision - made clear by Aldi's numbers - is illuminated by Morrisons dismal results on Monday: the Yorkshire-based grocer saw sales tumble -2.5% in the six weeks up to 30 December. "In a difficult market our sales performance was lower than anticipated," admitted chief executive Dalton Philips.

But Aldi's gain. "It seems that offering premium products at budget prices has paid off for the discount retailers," says Edward Garner from analysts Kantar Worldpanel.

Two nations

"The polarisation," Garner goes on, "of the market is highlighted by consumer spend levels which were widely anticipated to drop this year. While 47% of shoppers did reduce their spend in the lead up to Christmas, 48% of shoppers increased their spend by 4.5% (the rate of inflation) showing that 'two nations' continues to be a key feature of the grocery market."

Morrisons claimed their lack of an online sales offering made things difficult (but, note, no online outlet hasn't harmed Lidl or Aldi). Morrisons task has been made harder by strong performances by J Sainsbury's, whose positive results - it pulled in the highest growth of all Britain's big four grocers - were released this morning.

Okay to be cheap

Aldi and Lidl are about unabashed every-day value for money. No pretensions. On the other hand, what is Morrisons unique selling point? Value for money? Good fresh veg? Fish - or its meat pies?

Morrisons have so many messages out there it's difficult to know why you would choose it over the competition. Unless a Morrisons store was bang next door to your home. You certainly know why you're in Aldi or Lidl. Or, for that matter, Waitrose.

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