Discount supermarkets Aldi and Lidl have both reported ‘record’ Christmas trading after consumers on a budget flocked to their stores for cheap food and drink over the festive period.

Neither of these grocers are listed on the stock market.

However, shares in Tesco (TSCO) and Sainsbury’s (SBRY) ticked up 1% to 293.4p and 0.2% to 303.2p respectively as the positive festive read-across outweighed investor concerns over the competitive threats posed by Aldi and Lidl.

The superior share price gain for UK groceries leader Tesco than for second biggest player Sainsbury’s was the market’s way of saying which supermarket it believes enjoyed the better Christmas at the tills.

BUMPER SALES FOR ALDI & LIDL

Sales at Aldi’s UK arm topped £1.5 billion for the first time in the four weeks to 24 December 2023, representing an 8% year-on-year rise, as the UK’s fourth biggest supermarket helped millions of customers to ‘celebrate the festive season with the lowest grocery prices in Britain’.

Meanwhile, rival chain Lidl GB delivered its best Christmas since entering the British market in 1994, with sales up 12% year-on-year boosted by increased demand for its own-brand premium Deluxe line.

Lidl’s strong festive performance was supported by a surge in shoppers across the period, as 4.5 million more people came through its doors in December. In addition to being the busiest of the month, Lidl’s busiest day on record fell on Friday 22 December.

Aldi also said that 22 December was its busiest-ever trading day, with over 2.5 million customers visiting its stores for their full Christmas shop.

And with households still facing pressure from higher food costs heading into 2024, Aldi UK and Ireland chief executive Giles Hurley pledged to continue lowering the cost of groceries for families and offering simple, clear prices on every product.

‘As the UK’s cheapest supermarket, we were able to help customers enjoy the Christmas they deserve and provide them with high quality products at the most affordable prices,’ said Hurley.

‘As we look ahead to 2024, our promise to customers is that they will always make significant savings on every shop with Aldi because we have the lowest grocery prices in Britain.’

Fresh figures from the British Retail Consortium (BRC) released on 2 January 2024 showed that food price rises slowed significantly in December, partly due to the battle between retailers to cut prices in the run-up to Christmas.

‘Retailers will continue to do all they can to keep prices down in 2024, but there are obstacles on the road ahead,’ commented BRC chief executive Helen Dickinson, who flagged new border checks for products imported from the European Union and higher business rates costs from April.

GET SET FOR SAINSBURY’S

Simon Roberts-led Sainsbury’s is the first of the quoted supermarkets to report on Christmas trading when it updates the market on 10 January, with arch-rival Tesco and Marks & Spencer (MKS) to follow on 11 January.

All eyes will be on management comments about sales trends, such as whether hard-pressed shoppers opted for fewer items in their baskets or shunned the big brands in favour of supermarket own-label products amidst the ongoing cost-of-living squeeze.

Elsewhere on the FTSE 100, B&M European Value Retail (BME) and Marks & Spencer both caught a bid on the first day of 2024 trading as investors parked their money with companies making strategic progress.

B&M is one of the few Covid winners not to have suffered a major slump in demand as the pandemic faded away.

Meanwhile, Stuart Machin-steered Marks & Spencer has finally found the right ingredients to drive its turnaround efforts.

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