Aldi and Lidl have a combined 17% market share in 2023, but plan to open 51% of all UK grocery stores in 2024
Much is made of the fantastic data-sets from Nielsen and Kantar that describe current retail share performance, and rightly so, they are full of insights, but they describe what has happened rather than being forward facing.
If we want to understand the Retail landscape in the next 12 months, volume of openings and refurbishments and the impact on share, then that data-set is lesser known but available in the UK.
Barbour ABI holds a rich future looking data-set of Retail openings, recording and researching projects from planning application stage, right the way through to store opening.
In 2024, there are currently plans for 401 new Grocery Stores to open their doors to customers. Of these stores, 84 are scheduled to open in the first quarter of the year. It’s important to note that this number excludes stores currently undergoing refurbishment, totalling 146 projects, with more refurbishments likely to be scheduled throughout the year.
Notably, Aldi and Lidl are the retailers contributing the most to this wave of new store openings, accounting for 51% of the planned locations. This trend is likely to continue throughout 2024 as they seek further planning permissions. The figure below shows the continuing evolution of Aldi and Lidl’s Grocery market share as they have consistently opened real estate.
| 12 weeks to 25 Dec 2022 | 12 weeks to 24 Dec 2023 | Percentage Share Gain | Stores Opened in 2023 | |
|---|---|---|---|---|
| Tesco | 27.8% | 27.9% | 0.2% | 49 |
| Sainsbury's | 15.8% | 16.0% | 0.2% | 25 |
| Asda | 14.3% | 14.0% | -0.3% | 46 |
| Aldi | 8.6% | 8.9% | 0.3% | 47 |
| Morrisons | 9.2% | 8.8% | -0.4% | 38 |
| Lidl | 6.8% | 7.3% | 0.5% | 36 |
| Co-op | 5.1% | 5.0% | -0.1% | 44 |
| Waitrose | 5.1% | 4.9% | -0.2% | 2 |
| Iceland | 2.5% | 2.4% | -0.1% | 12 |
Figure 1. Retailer Till Roll Share of Trade 12 we (Kantar) and Retailer Store Openings (Barbour ABI). 2023 store openings still significantly impacted by COVID and financial impact on the sector and businesses. 2024 already shows sign of recovery and intent from retailers with further planned openings expected to be submitted in the coming year.
One well-established hypothesis in the Grocery Retail industry is that store proximity plays a significant role in consumer store choice. Therefore, retailers must carefully consider the geographical locations of their new store openings and their proximity to existing stores, be it their own or their competitors. Demographic data that is available can also play a vital role for retailers at a postcode level, to help them understand where they may be at risk but also seek out valuable opportunities.
Using spatial data, we are able to understand each retailers share of proximity to each new store opening as well as existing estate. The figure below illustrates Retailers existing estates Share of Proximity to Planned Store Openings. Surprisingly, the data challenges the misconception that opening new stores will automatically lead to new shoppers and growth for retailers at the expense of their competitors due to increasing likelihood of cannibalisation as their footprint increases. For Aldi and Lidl, a substantial proportion of their planned 2024 store locations are in direct competition with their existing estate however Lidl looks to be better targeting Aldi’s existing estate with planned openings while also challenging the Big 4, particularly Asda.
Figure 2. Retailer Share of Store Opening Proximity 1 Locations for New Planned Locations. Proximity 1 is calculated using postcode data to indicate the next closest store regardless of planning stage. Example: Tesco is the next closest store to 22.5% of Sainsburys planned Openings.
Looking at existing estates, our data reveals that among the “Big 4” retailers (Tesco, Asda, Sainsburys and Morrisons) Sainsburys has the best ‘estate coverage’ with the lowest proportion of its open real estate falling closest in proximity to its own stores. Between Aldi and Lidl, Lidl comes out on top with a lower proportion of footprint cannibalisation. With the planned store openings shown in Figure 2, this looks to only be strengthened by planned openings.
For many retailers, this level of internal competition, or ‘cannibalisation’, is almost inevitable unless there are significant housing developments to help stretch footprints. Without delving too deeply into politics 2024 may bring about significant changes in leadership, and from a construction perspective, plans for “1.5 million new homes” has been positioned as a key pledge. For retailers they will need to be closely monitoring these announcements and subsequently competing for prime real estate where consumers can easily shop if substantial developments come to fruition.
Barbour ABI is well-positioned to assist retailers of all sizes in understanding the current planning landscape and how it might evolve in the future. We can help ensure that your estate development plans align with your goals and you can leverage our market leading dataset to help spot the next opportunity.
If you would like to learn more, please don’t hesitate to get in touch at ed.griffiths@barbour-abi.com, or james.lyall@barbour-abi.com.
