Millennial shoppers flock to Aldi and Lidl
Aldi and Lidl are the big winners when it comes to attracting millennial shoppers, according to new research from Nielsen.
It revealed that grocery spend in Britain is up 2.7% year-on-year, but that jumps to 7.9% in households where a millennial – someone it defines as being aged 16-35 – is the main shopper.
That puts it way ahead of the next fastest-growing spending group, which is households led by people aged 65-plus and is up 3%.
Asda has historically been their grocer of choice, but millennials are increasingly migrating to Aldi and Lidl, according to Nielsen.
Millennial spend at Aldi increased 46% year-on-year, compared to a 19% increase across all Aldi shoppers. Millennial spend at Lidl rose 28%, nearly twice the rate across all shoppers (15%).
“Millennials are freeing up more income to spend on groceries,” says Mike Watkins, Nielsen’s UK head of retailer and business insight. “This is mainly due to millennials shopping more frequently and continuing to buy more per trip. This is down to the increasing number of local store formats, which suit their top-up lifestyle and can include spending more on food consumed outside the home, much more than the big weekly trip to a large out-of-town store.
“Although millennials, particularly families, have historically over-indexed on shopping at Asda, they’re now really driving the growth of the discounters.
“However, it’s important not to think of millennials as one homogenous group, for example, they’ve also increased spend dramatically at M&S, which has a large price difference to the discounters due a different product assortment.”
Aldi has been much more successful at gaining the millennial pound in the north, capitalising on its stronger presence in locations there.
But Aldi under-performs in London compared to Lidl due to having far fewer stores in millennial catchment areas.
Despite Lidl’s better performance in London, regions less populated with millennials, such as Wales and the South West, are also driving its overall success.
“The media, retailers and marketers tend to have a picture of millennials as London-based hipsters shopping at wholefoods,” said Watkins. “However, they’re driving growth at Asda and the discounters and have an overly strong presence in the north. Retailers need to look beyond labels and understand actual behaviour if they want to appeal to this crucial group more successfully.”