ALDI and Lidl Thrive While Others See Dip in Q1 2022

Record inflation continues to have an impact on grocery shopping for consumers, but some discount retailers, including major players in private label, are thriving. According to the Grocery Deep Dive May 2022 report from retail analytics group Placer.ai, ALDI, Lidl, and other discount grocery chains are “expanding aggressively and becoming household names.”

The 40-year-high rate of inflation led the Federal Reserve to raise interest rates on Wednesday. While the inflationary period has meant success for private label, Placer.ai’s new report shows that grocery chains overall had a difficult Q1 of 2022 when it came to foot traffic.

“The grocery sector displayed incredible resilience to the pandemic, exhibiting a seeming imperviousness to shutdowns and the general economic downturn anticipated as a result,” said Placer.ai. “But while most leading and regional grocery players managed to survive, and even thrive, despite the global pandemic, more recent challenges – including labor shortages, inflation, and supply chain issues – are proving tougher to weather. Still, even under the current conditions, several grocery chains have succeeded in implementing winning strategies or finding innovative ways to make the most of their store fleet.”

A slow Q1 2022 followed a strong year for grocery in 2021 as many Covid-19 restrictions were lifted. Placer.ai said the industry capitalized on its pandemic success by expanding, with a reported 200% increase in new grocery store leases in 2021 as compared to the number of new leases in 2019. In February of 2022, consumers saw record inflation and high gas prices, leading to the first Yo3Y drop in monthly visits after 10 straight months of rising visits.