The supermarket chain Lidl clearly emerges strengthened from the 'price war'. The food inflation crisis has marked the strategies of distribution companies since the beginning of the year and, at this point, it can be said that the German is one of those that has best focused theirs, leading growth in market share. However, Mercadona, after a hesitant start to the year, managed to turn it around with its price reduction campaign and consolidate itself as the undisputed market leader.

This is the main conclusion drawn from the latest distribution balance of Kantar Worldpanel, which analyzes the period from January to August 2023 and reveals that Lidl has reached a market share of 6.3%, which is 0.6 points more than last year, while Mercadona accounts for 26.1%, 0.3 points more than a year ago.

Although it is the data of the whole of the period analyzed in the panel, the most recent records reflect that, while Lidl has gained one tenth more and already stands at 6.4%, Mercadona has broken all records and came to take in July practically 27% of the market, specifically, 26.6%, according to the latest available data.

From Kantar they explain that Lidl's growth is built on a first quarter of the year in which it gains business from all its competitors, but mainly from Mercadona, which, after a "hesitant" start to the year, reacts with the campaign of lowering prices to 500 products and grows again. In fact, the Valencian gains share not only in the categories affected by the reduction, but also achieves a change of transversal trend in 6 out of 10 references.

In a positive context for distribution in general, which grew as a whole by 8.3% driven by the general escalation of food prices, Carrefour starts 0.2 points of market share and climbs to 9.9%. A good evolution that is supported by its hypermarket, which continues to gain attractiveness among its buyers after the pandemic.

Among the 'losers' stands out Dia, which presents the largest drop in share by losing 0.4 points, which makes it fall back to fifth place nationwide, with 4.3%. The main reason behind this decline is the sale of stores to Alcampo, since "it does manage to register a better behavior at constant surface", clarify from Kantar.

It is Eroski that now occupies the fourth place with a share of 4.4%, after gaining 0.1 points thanks to the good evolution in the Northwest of the country, where it reinforces its commitment to local suppliers. It grows both in the fresh section and in packaged mass consumption.

Behind are Consum, with 3.4%; Alcampo, with 3.1% to gain buyers reinforced by the acquisition of the package of stores of Dia; and Aldi, which with 1.5% is consolidating its growth with the opening of stores, as indicated by Bernardo Rodilla, Retail Client Director of Kantar Worldpanel, during the presentation of the report.

Changes in Consumption Habits

Kantar's analysis confirms how the spiral of inflation is consolidating certain changes in the consumption habits of Spanish families. For example, the rebound of private label to compensate for price increases. The so-called private label is growing at a record rate and already accounts for 43.5% of spending on packaged mass consumption, 2.2 points more than the previous year.

The trend observed since the beginning of this year of acquiring smaller baskets is also maintained, although that means going to the supermarket more times. Consequently, customers visit more chains and there is the great challenge of distribution, according to Kantar, which is to retain the spending of a consumer who now tends to distribute his shopping basket among more chains.

Another key in the current context is in promotions. And here communication and work on the perception of the price is "very important", as indicated by Rodilla at a press conference. In this sense, "Mercadona's communication shows that the response of consumers to price actions is not based on purely rational criteria," he said, to insist that "the important thing is to work on perception, where promotion and communication play a key role."

  • Mercadona
  • Supermarkets
  • Carrefour
  • Lidl
  • Alcampo
  • Inflation
  • Feeding