Aldi and Lidl set for strong Christmas as supermarkets tussle for trade

Budget supermarket chains Aldi and Lidl are set to outperform their larger peers this Christmas as the battle for festive shoppers reaches its climax this weekend.

Analysts at Shore Capital forecast that both will record positive like-for-like sales growth and further increase their market share over the critical trading period, building on a stellar run of form.

“I think that the German domiciled grocery discounters will have a good Christmas overall and relative to the pack a very good one indeed,” said Shore’s Clive Black.

“No doubt the low tide of activity in November would have been felt by them too, commented upon by many, but we’d also expect some like-for-like sales growth and market shares gains too.

The German pair have notched up a series of record trading performances over the festive period in recent years, wiping the floor with established players.

Over the past decade, Britain’s so called big four grocery chains – Tesco, Asda, Sainsbury’s and Morrisons – have had their market share eroded by Aldi and Lidl, which continue to grow.

The budget duo tend to benefit when consumers tighten their belts.

The latest consumer confidence index from GfK shows that consumers feel more downbeat as Christmas approaches than they did when the year started, in the face of Brexit worries.

Only last month, Sainsbury’s added to fears over lacklustre consumer spending in the run-up to December 25, as it warned of an uncertain outlook amid “unprecedented times”.

“Unlike most other supermarkets in the UK, both (Aldi and Lidl) are opening new stores whilst they are also quite effectively evolving to limited assortment supermarkets, as opposed to their original composition as limited assortment discounters,” Mr Black added.

The battle for Christmas shoppers comes as the wider high street descends further into turmoil following a bleak 2018.

This year has been marred by the administrations of several high-profile retailers, including House of Fraser, Maplin, ToysRUs and Evans Cycles.

High street firms and supermarkets will be hoping that Christmas, the busiest time of year for the sector, finally brings some cheer.