Boost for shoppers as Aldi makes price pledge

The budget supermarket said it would “do whatever it takes” to maintain discounts.

If you’re desperate to keep your food shop at an affordable level, then you could do a lot worse than doing your shopping at Aldi.

The deep discounter has announced it is focusing on keeping lower prices for customers, rather than making the most of the cost of living crisis by maximising profits.

When Aldi announced its latest results, it said its buying teams had been tasked with maintaining the savings you enjoy from shopping at Aldi compared with high street supermarkets.

Aldi CEO Giles Hurley has said it would “do whatever it takes to maintain our discount to the traditional full price supermarkets and keep grocery prices as low as possible for the millions of customers that shop with us.”

To that end, it is on an expansion drive, with 16 new stores due to be opened over the next 12 weeks.

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Switching supermarket

According to Aldi’s own figures, around 1.5 million extra shoppers have spent money in its stores over the last 12 weeks, while increasing numbers of shoppers are choosing to do all of their grocery spending in Aldi rather than using the deep discounter to supplement the food they purchase elsewhere.

This is reinforced by figures from Kantar WorldPanel, which tracks the market share of supermarkets.

It has found that since Christmas, Aldi’s market share has jumped from 7.7% to 9.3%, making it the fourth biggest supermarket in the country, having overtaken Morrisons.

Aldi isn’t the only one to see this happen this year. Lidl, for example, has seen its market share move from 6.3% to 7.1%, while Co-op has moved from 5.8% to 6.5%.

And that market share is coming from shoppers moving away from the big supermarket names.

For example, Tesco’s market share has dropped from 27.9% to 26.9%, Sainsbury’s moved from 15.7% to 14.6%, and Morrisons has fallen to 9.1% from 10.1%.

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Making your money go further

A big factor in increasing numbers of shoppers turning towards the likes of Aldi and Lidl is the pricing.

It’s no secret that these deep discounters are cheaper than big supermarkets, which has always been tempting for those of us who like to get value for money.

But as household budgets have become more stretched due to the cost of living crisis, the potential to save some cash on grocery budgets has become even more compelling.

Just how big those potential savings are is made clear by the monthly research carried out by Which?. The consumer champion tracks how much standard shopping baskets would cost at each of the main names every month.

The latest research in August found that a typical basket of 49 items would come to £76.24 at Aldi, just ahead of Lidl at £77.90. 

The difference from the big supermarket names was stark, though.

Asda was the next cheapest at £85.99, but at Sainsbury’s (£88.05) and Tesco (£88.48) you’re looking at a premium of over £10 for the basket of items.

Over the long term ‒ and particularly for bigger baskets ‒ that cost difference really starts to add up, so it should not be surprising that so many shoppers are choosing to switch supermarkets in order to reduce their grocery bill.

It’s also worth noting that Aldi highlighted sales of its ‘specially selected’ range of goods ‒ essentially its premium items ‒ jumped by 29% over the last 12 weeks.

That tells its own story, in my view ‒ shoppers still want quality food and are willing to pay a little extra for it, so long as they feel they are getting value for money overall.

This isn’t a case of shoppers as a whole switching to the absolute cheapest, own brand items.

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What happens next?

The price of food is a big concern for many of us.

It’s difficult not to have noticed the increased cost that we pay at the till as food prices are one of the big drivers of the overall rate of inflation at the moment. 

Unfortunately, the turmoil that we have seen with the pound seems likely to make that situation even worse.

We import a lot of the food that we eat in the UK, and the cost of that food is going to rise as a result of the falling value of the pound.

Even if the food is produced here, some of the ingredients or materials involved in that production will be imported, again having an impact.

More and more people are going to see the cost of their grocery shopping increase in the future, which will necessitate some difficult choices over precisely where we pick up our food.