The retailer stated last month’s successful Christmas trading was boosted by strong sales of vegetables, turkey and cheap lobster.
Matt Walton, an analyst at Verdict Retail, said Lidl has followed up on Aldi’s impressive Christmas growth following a similar template to its discounter rival: overall low prices with promotions on festival fruit and vegetables and premium items.
Sales through the retailer’s ‘Pick of the Week’ promotion on fruit and vegetable grew by 60 per cent. Lidl also more than doubled sales of Prosecco and increased turkey sales by 40 per cent following on from its Christmas advertising campaign which emphasised its quality.
“It is notable that it has not given any indication of its l-f-l performance, and its results have been driven by rapid expansion, which will continue as it plans to open 50 stores in 2017,” said Walton. “Lidl has invested heavily in its distribution network, opening its largest distribution centre in Southampton in November 2016 and is set to open warehouses in Thurrock in Essex, Exeter, Doncaster and Wednesbury, near Birmingham, to support this expansion.”
According to Walton, Lidl’s new advertising campaign, “Big on Quality, Lidl on Price”, aimed at improving its quality perceptions, is the right move for Lidl as it can drive growth in basket size among existing shoppers and encourage shoppers at the ‘big four’ retailers to trade down.
“Discounters have been the early winners so far for Christmas 2016, with Lidl, B&M, and Aldi posting stellar increases and indications that Iceland also had a robust December,” Walton said.
He added this shows that shoppers have begun to trade down in preparation for the expected tougher conditions.
“With its continued focus on price, new store openings and greater emphasis on quality, Lidl will remain one of the big winners in grocery in 2017.”