The likes of Aldi and Lidl performed strongly for the 12 weeks ending 23 December according to the latest retail data from Kantar Worldpanel.

Over the festive period, Aldi, Lidl and Iceland each posted respective growth rates of 30.1, 10.8 and 9.7 per cent. Iceland's 2.2 per cent share of the grocery market is a 12-year record for the retailer as it plans to up its offer of fruit and vegetables.

Total grocery market figures grew 3.2 per cent, the same as the previous period, Kantar reported.

Meanwhile, Tesco's market share has dipped by 0.1 per cent. However, this is seen as an improvement with the retailer posting an average market share drop of 0.4 per cent throughout 2012.

Morrisons recent downward spiral also continued as it was the only UK retailer to lose sales compared to last year with a 0.6 per cent drop, and analysts have blamed the retailer's lack of an online service and convenience stores for the decline.

But the retail data for the festive period represents positive news for Sainsbury's, which was the only retailer to increase its market share - from 17.0 to 17.1 per cent - over the same period last year.

“Historically, the discounter sector has seen its share dip at Christmas as shoppers treat themselves and trade up, but the all-time record share of 3.2 per cent for Aldi is a sign of the times and shows that this is no longer the case,' said Edward Garner, director at Kantar Worldpanel.

Kantar's measure of grocery price inflation has sharply increased to 4.5 per cent according to Garner.

He added: “The polarisation of the market is highlighted by consumer spend levels which were widely anticipated to drop this year. While 47 per cent of shoppers did reduce their spend in the lead up to Christmas, 48 per cent of shoppers increased their spend by 4.5 per cent (the rate of inflation) showing that ‘two nations’ continues to be a key feature of the grocery market.”

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