Lidl GB’s sales soar by over 10%, helped by price cuts and Deluxe range

Lidl, the German-owned supermarket chain, has reported a significant surge in sales in Great Britain, soaring over 10% to more than £13 billion this year. Shoppers are drawn to Lidl's cheaper fresh meat, fruit, and vegetables, as well as its Deluxe range. Pre-tax profit for Lidl's British operations grew by 30% to £245.5 million in the year ending February, up from £156.8 million in the previous year.

The rise in sales can be attributed to the increasing trend of shoppers seeking out discounted products amidst rising food inflation. In-store prices have climbed to an annual rate of 1.5%, up from 0.9% in July. Inflation for fresh produce remains high at 3%.

Lidl has invested £315 million in price cuts and promotions, including its "pick of the week" product. Additionally, the number of shoppers opting for the Deluxe upmarket food range has increased. Ryan McDonnell, the chief executive of Lidl GB, stated that Deluxe sales are up 12%, as more households are choosing to dine in rather than eat out, looking to "trade up and treat themselves at home."

This year, Lidl has surpassed Morrisons to become the fifth-largest grocer in Great Britain, holding a market share of 8.6%. This surpasses Morrisons' 8.3% share, which only increased by 1.3% year-on-year. Both Aldi and Lidl have experienced rapid growth, partly due to slower performance at Asda and Morrisons following their acquisition in debt-fuelled private equity deals.

However, Aldi's growth has slowed as Tesco and Sainsbury's offer more savings through loyalty schemes and competitive pricing. Lidl's loyalty program, Lidl Plus, has seen a 23% rise in participants this year. Analyst Clive Black, vice-chair at Shore Capital, attributed this growth to Lidl's strong loyalty program, contrasting it with Aldi's lack thereof, which he criticized for offering "unrealistically high prices" that seemed to "duke customers".