Lidl has come out swinging in 2025, with a price comparison campaign targeting an array of non-direct rivals from Ikea to Wayfair in its weekly customer leaflets.

But it’s particularly interesting, from a food and drink perspective, to see it taking aim at Home Bargains, a foe closer to its own patch.

Both discounters have proved resistant to a slowdown in growth seen by their direct rivals amid an easing cost of living crisis and a formidable fightback by Tesco and Sainsbury’s, with loyalty pricing and matching campaigns.

Lidl has been the fastest-growing bricks and mortar grocer in Kantar data for 17 months in a row. At the same time, Aldi’s sales growth slowed to a near flatline of 0.3% year on year by last June. It is now bouncing back, to 4.2% year on year growth in the 12 weeks to 26 January 2025, but still some way off Lidl’s 7.4%.

Home Bargains, meanwhile, saw double-digit turnover growth in its latest financial year to 30 June 2024, at 11.7%, which it credited to growing sales from existing stores as well as the addition of 23 new ones. It is a different story to that of B&M, which saw like-for-like sales from existing stores fall 3.6% in the UK in its first half to 28 September, and then by 2.8% in its third quarter to 28 December.

And then of course there is Poundland, grappling with a self-inflicted crisis in both ranging and customer offer, which most recently led to like-for-likes falling 7.3% in its first quarter to 31 December.

It leaves Lidl and Home Bargains as “definitely the fmcg discount kings in the UK” at the moment, according to Shore Capital analyst Clive Black.

The difference is Lidl’s dominance lies largely in own label, Black notes, while Home Bargains leads on brands – although Lidl has nevertheless challenged it on the latter. One in-store Lidl poster boasts of a £2 saving on 15x750ml bottles of Highland Spring, which are on sale for £2.99 versus £4.99 at Home Bargains.

Grocery Insight’s Steve Dresser – who posted a photo of the comparison on X – says: “It’s representative of the confidence Lidl have.”

More than a Lidl confidence

Another sign of confidence came today, with an announcement of a pay rise for its staff. Lidl and Aldi have for some years been the UK’s joint highest-paying supermarkets, because their expansion amplifies the pressure to recruit compared with their traditional supermarket rivals. Where one discounter has announced a pay rise first, the other has typically matched it with effect from the same date.

Lidl has gone further this time, by not just matching Aldi’s new national store worker pay from 1 March but exceeding it, by 4p per hour.

It pulls the rug from Aldi’s claim in January that it would be “maintaining its position as Britain’s best-paying supermarket”, and there are likely to have been some hastily called meetings at its Atherstone HQ today to think again.

Both are currently opening stores. Aldi has added about 10 since December, taking its estate to more than 1,050, and last week said it would create 1,600 new jobs through further expansion this year. Lidl says it will open nine within the next month, including five that are reopening after being extended and modernised, to add to its current 970-plus stores.

But Lidl has better proved its sales growth is not dependent on opening new stores, because it has more capacity to grow in its existing ones, helped by the popularity of its loyalty scheme.

It opened few stores from January to October last year, yet still managed to be the fastest-growing bricks and mortar supermarket throughout 2024. It then opened 10 in the final two months of the year, in what it called “accelerated expansion plans”.

Perhaps it is this acceleration, combined with the knowledge it has reached a point where expansion is a bonus rather than a necessity, which is making Lidl so confident in 2025.

Topics