Lidl GB’s sales soared by over 10% to more than £13bn this year, as shoppers flocked to the discounter for cheaper fresh meat, fruit, and vegetables, and snapped up its Deluxe range. The German-owned supermarket’s British arm reported a 30% jump in pre-tax profit to £245.5m for the year ended in February, up from £156.8m the previous year.
The strong performance comes amid rising food inflation, with in-store prices stepping up to an annual rate of 1.5% in August, up from 0.9% in July. Inflation for fresh produce remained high at 3%. Lidl said it had spent £315m on price cuts and promotions such as its “pick of the week” product, while increasing numbers of shoppers were choosing its Deluxe upmarket food range.
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Lidl GB’s Sales Growth Driven by Price Cuts and Promotions
Lidl’s aggressive pricing strategy has clearly resonated with cash-strapped consumers. The supermarket invested £315m in price cuts and promotions, helping it attract shoppers looking to save money on everyday essentials. According to Lidl GB chief executive Ryan McDonnell, “Deluxe sales are up 12% as more households dine in rather than eat out. Customers are looking to trade up and treat themselves at home.”
This trend of trading up within the discounter’s own brand offerings highlights a broader shift in consumer behaviour. As food inflation continues to bite, shoppers are seeking value without compromising on quality, and Lidl’s Deluxe range appears to fit the bill perfectly.
Market Share Milestone: Lidl Overtakes Morrisons
This year, Lidl beat Morrisons to become the fifth largest grocer in Great Britain, with its market share hitting 8.6% in the 12 weeks to 17 May, according to figures from market analysts Worldpanel by Numerator. That compared with an 8.3% share for Morrisons, which increased its sales by just 1.3% compared with a year earlier.
The rise of Aldi and Lidl has been partly attributed to slowing performance at Asda and Morrisons after both were acquired in debt-fuelled private equity deals. These ownership changes may have diverted focus from day-to-day operations, allowing the discounters to gain ground.
Lidl vs. Morrisons: A Comparative Snapshot
| Metric | Lidl GB | Morrisons |
|---|---|---|
| Sales Growth (YoY) | 10% | 1.3% |
| Market Share (12 weeks to 17 May) | 8.6% | 8.3% |
| Pre-tax Profit (Year to Feb) | £245.5m | Not disclosed |
| Investment in Price Cuts | £315m | Not disclosed |
Key Takeaways for Retailers and Shoppers
- Price cuts work: Lidl’s £315m investment in lowering prices and running promotions directly contributed to its double-digit sales growth.
- Premium own-brand ranges are a hit: The Deluxe range saw a 12% sales increase as consumers opted for affordable indulgences at home.
- Discounters are winning market share: Lidl’s overtaking of Morrisons signals a lasting shift in UK grocery shopping habits.
- Inflation remains a factor: With food inflation still elevated, value-focused retailers are likely to continue their momentum.
FAQ
How much did Lidl GB’s sales grow?
Lidl GB’s sales increased by over 10% to more than £13bn in the year ended February.
What drove Lidl’s sales growth?
The growth was driven by £315m in price cuts and promotions, as well as a 12% increase in sales of its Deluxe premium range.
Did Lidl overtake Morrisons in market share?
Yes, Lidl became the fifth largest grocer in Great Britain with an 8.6% market share, compared to Morrisons’ 8.3%.
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