Aldi and Lidl continue to march ahead of big four rivals

The ‘fightback’ by Tesco, Sainsbury’s, Asda and Morrisons has had no impact on the discounters, which have doubled their share of the market in three years

 Aldi continues to draw in shoppers and expand; together with Lidl, the two discounters now have 10% of the market. Photograph: Jason Alden/Bloomberg/Getty

Nils Pratley

Tuesday 17 November 2015 14.38 ESTLast modified on Tuesday 17 November 201517.01 EST

Six months ago it was possible to think Aldi and Lidl had enjoyed their moment in the sun and that the fightback by the old guard – Tesco, Sainsbury’s, Asda and Morrisons – would have an impact. After all, the big four told us they were “investing” in price – their coy term for cutting prices – while improving service and the quality of goods.

The tactics aren’t working, or at least they haven’t been pursued sufficiently aggressively. The latest data from compilers Kantar shows Aldi and Lidl are accelerating again. As a pair, the discounters are now 10% of the market. Part of that increase is mechanical – if you open more stores when others do not, your share of the market tends to increase. But consumers are also happy to shop around: almost half of all shoppers now visit a discounter and a regular full-line supermarket every quarter.

As Kantar pointed out, Aldi and Lidl have grown from 5% of the market to 10% since 2012; it had previously taken the duo nine years to crawl from 2.5% to 5%. It is probably now too late to prevent the discounters from claiming 15% because they are flogging expansion for all its worth. But, if the mainstream brigade wish to stop 15% becoming 20%, they will have to start throwing some punches that the opposition actually feels.

It is jarring, for example, to hear Andy Clarke, the chief executive of Asda, after yet another weak trading quarter, talk about “closing the gap” with the limited assortment discounters. Why can’t Asda offer a core range of similar goods that eliminates, rather than merely closes, the gap?

The short answer is that Asda prefers to protect its profit margins as far as it can. But that strategy is starting to look extremely short-termist. David McCarthy, an analyst at HSBC, suggests the big boys should lower prices by 15% on their core ranges. That sounds more like what is required.