BIG NEWS
6 | SHARES | 24 May 2018
L
idl may be planning to enter the online
grocery delivery market in a fresh assault
against the UK’s largest supermarket chains,
according to media reports. The German
discounter has registered the name ‘Lidl Digital
>ŽŐŝƐƟĐƐ͛ĂƚŽŵƉĂŶŝĞƐ,ŽƵƐĞĂŶĚĐŽƵůĚďĞ
ƚĂƌŐĞƟŶŐƚŚĞŐƌŽĐĞƌLJĚĞůŝǀĞƌŝĞƐĂƌĞŶĂ͘
Because they operate a low cost model,
discount companies such as Lidl have hitherto
avoided e-commerce, preferring to invest in
keeping prices low in store rather than incurring
the added costs of picking, packing and delivering
products to customers.Rumours of Lidl going online is
bad for Tesco and Sainsbury’s
Supermarkets need to prepare themselves for the latest competitive threat
,ŽǁĞǀĞƌ͕ƚŚĞƌŝƐĞŝŶƚŚŝƌĚƉĂƌƚLJĚĞůŝǀĞƌLJƐĞƌǀŝĐĞƐ
is opening doors for more supermarkets, enabling
them to cater to growing demand for online
grocery without the need for heavy investment
in systems and infrastructure.
dŚŝƐŝƐƚŚĞĮƌƐƚƟŵĞ>ŝĚůŚĂƐƐŝŐŶĂůůĞĚĂŶŝŶƚĞƌĞƐƚ
in moving online and the move would represent
ĂƐŝŐŶŝĮĐĂŶƚŶĞǁƚŚƌĞĂƚƚŽƚŚĞŐƌŽǁŝŶŐŽŶůŝŶĞ
ŽƉĞƌĂƟŽŶƐŽĨTesco (TSCO) and J Sainsbury (SBRY).
ZĞƚĂŝůŝŶĚƵƐƚƌLJǁĂƚĐŚĞƌƐǁĞƌĞůĞŌƐƚƵŶŶĞĚďLJƚŚĞ
news in April that J Sainsbury and Asda wanted to
combine forces in a supermarkets super-merger.
Against a backdrop of the relentless rise of online
shopping and Amazon, and the threat from Lidl
and Aldi, J Sainsbury plans to acquire Asda from
Walmart in a deal that will see the US retail
ďĞŚĞŵŽƚŚďĞĐŽŵĞƚŚĞĞŶůĂƌŐĞĚĞŶƟƚLJ͛ƐďŝŐŐĞƐƚ
shareholder with a 42% stake.
dŚĞůĂƚĞƐƚŐƌŽĐĞƌLJŵĂƌŬĞƚƐŚĂƌĞĮŐƵƌĞƐĨƌŽŵ
Kantar Worldpanel (1 May), covering the 12 weeks
to 22 April, showed disruptors Aldi and Lidl growing
ƚŚĞŝƌŵĂƌŬĞƚƐŚĂƌĞƐƚŽϳ͘ϯйĂŶĚρ͘κйƌĞƐƉĞĐƟǀĞůLJ͘
The data revealed market shares of 15.9% and
ϭρ͘ρйĨŽƌ:^ĂŝŶƐďƵƌLJĂŶĚƐĚĂƌĞƐƉĞĐƟǀĞůLJ͕ďŽƚŚ
down year-on-year, while Tesco maintained its
market leadership at 27.6%.
In the sector’s other major development, shares
in online grocer and e-commerce technology
licensor Ocado (OCDO)ŚĂǀĞƐŽĂƌĞĚĂŌĞƌƐĞĐƵƌŝŶŐ
a partnership deal with US grocer Kroger, giving it
a foothold in the vast American groceries market.
Following on from similar deals to provide
ƚŚĞKĐĂĚŽ^ŵĂƌƚWůĂƞŽƌŵƚŽĂŶĂĚĂ͛Ɛ^ŽďĞLJ͛Ɛ͕
&ƌĂŶĐĞ͛Ɛ'ƌŽƵƉĞĂƐŝŶŽĂŶĚ^ǁĞĚĞŶ͛Ɛ/͕KĐĂĚŽ
will license out its technology for Kroger’s exclusive
use in the US, where it is a market leader with sales
ŽĨΨϭϮϮďŶŝŶĮƐĐĂůϮϬϭϳ͘
Ocado, which powers Morrison’s (MRW) online
delivery service in the UK, believes Kroger is the
ĐŽŵƉĂŶLJďĞƐƚƉŽƐŝƟŽŶĞĚƚŽǁŝŶŝŶh^ŐƌŽĐĞƌLJĂŶĚ
ŚĂǀŝŶŐŝŶŬĞĚƚŚŝƐĚĞĂů͕ŝƚǁŝůůŶŽǁĐĂůůŽīƚĂůŬƐǁŝƚŚ
ŽƚŚĞƌh^ͲďĂƐĞĚƌĞƚĂŝůĞƌƐ͘;:ͿMARKET SHARE
Source: Kantar Worldpanel (1 May), covering the 12 weeks to 22 AprilTESCO
27.6%SAINSBURYS
15.9%ASDA
15.5%ALDI
7.3%LIDL
5.4%OTHER
27.6%