Millennials are ‘driving discounter growth’

Millennial households are the fastest-growing grocery shoppers and are driving the growth of the discounters, according to new Nielsen data.

Spend in milliennial households (aged 16-35) is up year-on-year by 7.9 per cent, compared to overall grocery spend in the UK (up 2.7 per cent) and the next fastest-growing spenders, the over 65s (up three per cent).

The average millennial household with children now spends an extra £210 annually on groceries, while millennial households without kids spend £113 extra, Nielsen said.

Nielsen’s UK head of retailer and business insight Mike Watkins said the trend is down to the increasing number of local store formats, which suit millennials’ ‘top-up’ lifestyle. This group also tend to spend more on food outside the home – much more than the big weekly trip to a large out-of-town store, he added.

“Millennials are freeing up more income to spend on groceries. This is mainly due to millennials shopping more frequently and continuing to buy more per trip,” he said.

Millennial spend at Aldi has increased by 46 per cent year-on-year – compared to a 19 per cent increase across all Aldi shoppers. The trend is matched at Lidl, where millennial spend at Lidl rose 28 per cent – nearly twice the rate across all shoppers (15 per cent).

“Although millennials, particularly families, have historically over-indexed on shopping at Asda, they’re now really driving the growth of the discounters,” said Watkins.

“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.

“The media, retailers and marketers tend to have a picture of millennials as London-based hipsters shopping at wholefoods,” he said. “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.”