Ireland: Lidl’s strong growth continues in 2021

Date : 09 February 2021

Lucy Ingram

Retail Analyst

The Irish market grew 16.4% in the 12 weeks to 24 January, according to the latest results from Kantar. Irish shoppers spent an extra €142.8m combined on take-home groceries compared to last year. Growth was driven by the festive season and the reintroduction of lockdown restrictions.

A January like no other

Growth has accelerated further in the last four weeks, with sales +16.8%. The return of homeschooling in January has impacted families spends, with households with children spending €172 more on take-home groceries in the latest four weeks.

January looked different to usual in many ways, leading shoppers to move away from the traditional change in dietary habits brought about by a new year. 15,000 fewer Irish households purchased meat-free alternatives during the period compared to 2020. This drove a 5.2% decline in sales. 

For subscribers who are interested in the Veganuary trend in other markets, check out our Veganuary UK, 2021 report.

Lidl outperforms the market, as Aldi underperforms

Lidl continued to see the fastest growth of all the major retailers, with sales +25.6%. Shoppers spent an additional €77.9m in store.

Aldi's sales grew 15.3% during this period. Growth was driven by shoppers adding more to their baskets.

In other Aldi news, the discounter has recently announced it will be extending its 'fast-track' payments to Irish suppliers for all of 2021. The initiative was first started at the beginning of the pandemic. Aldi committed to processing payments within five working days for suppliers that transact up to €1m worth of business annually. This will be welcoming news for suppliers in the current challenging trading environment, particularly as Brexit begins to have an impact.

So far Brexit has had a mixed effect on the supply chain and shoppers. There have been some shortages seen in fresh fruit, particularly with tropical items. This has driven an uplift in sales of Irish vegetables, with sales increasing 18.5% in the last four weeks.

Record sales through digital channels

Sales of groceries through digital channels reached a record share in this period, accounting for 5.2% of the market.

Tesco and SuperValu's sales were helped by their online presence, with sales of +16.5% and +18.5% respectively. Tesco's sales were also boosted by larger basket size, with shoppers adding an average of 3.5 items to their trolleys. This was the biggest increase in trip size amongst all the retailers.

In response to the growing demand for online shopping, Aldi launched a trial of its click and collect service in its Sallynoggin store in Dublin this week. If successful, the service will be rolled out to as many as 15 stores according to Retail Tech Innovation Hub. This is in addition to the free service it provides with Deliveroo, from 18 stores throughout Dublin, Cork, Galway and Limerick.

There is a huge opportunity for Aldi to satisfy shoppers' needs for more convenience and contact free shopping, and to potentially engage with new shoppers through click and collect. However, the costs of operating online are high, with picking and packing placing extra demand on stores resources. This is a challenge for Aldi, who's main focus is efficiency.

One option is to pass these costs onto the customer, as we have seen the retailer do by adding a €4.99 charge for its click and collect service in Ireland. This is not only higher than its competitors, Tesco and SuperValu, whom offer the service for free, but also impacts its value proposition. Shoppers visit Aldi to help them save money, therefore this charge may be a barrier.

Despite the many potential online operating models we believe that click and collect is still the best option for Aldi. It is efficient and does not have the last mile costs and complexities of home delivery, and is therefore more cost effective.

Subscribers looking for more insight on Aldi's click and collect proposition should read our test driving Aldi’s click & collect grocery service. This report looks at the service in more detail following its launch in the UK. We also consider the various online grocery models and share our views on the likeliness of their roll out by discounters in our how will discounters respond to online?

Detailed results

Total take home grocery consumer spend 12 weeks to 26 January 2019 12 weeks to 24 January 2020 % Change in value sales
Total outlets 100% 100% 16.4%
Total multiples 89.6% 89.8% 16.6%
Dunnes 23.6% 22.6% 11.3%
Tesco 21.8% 21.9% 16.5%
SuperValu 21.7% 22.1% 18.5%
Aldi 11.4% 11.3% 15.3%
Lidl 11.0% 11.9% 25.6%
Other outlets 10.4% 10.2% 14.6%

 

Looking for more insight? 

Take a look at our 12 month view of the Kantar Irish grocery market results.

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