Despite the growth of Aldi and Lidl, traditional UK supermarket brands, Tesco and Sainsbury’s have been performing strongly in recent years with both increasing their market share since 2022*.
In such a fiercely competitive sector, this really is quite an achievement.
So, how have they managed to do this? It’s not due to being cheaper; price data from our sister company, ESA Retail, reveals that Tesco, and especially Sainsbury’s, are considerably more expensive than Lidl and Aldi.
One factor could be that consumers tend to overestimate Aldi’s prices. However, the most notable insight from our research is that Tesco and Sainsbury’s are perceived as offering better quality relative to their price, allowing them to justify a significant price premium.
This perception of quality (along with a broad range of products and established loyalty programmes), makes both Tesco and Sainsbury’s formidable brands.
In contrast, Asda and Morrisons appear to be finding things tougher. Their perceived ‘quality’ is only slightly higher than Aldi and Lidl meaning that they inevitably find themselves competing more on price – Asda has in fact recently announced price cuts on its core range with its “Big Jan Price Drop”.
Aldi and Lidl are comfortably the cheapest supermarkets
Using pricing data from ESA Retail (part of the BDRC Group) we’ve looked at the actual price of typical Christmas day goods from a selection of UK supermarkets.
The basket includes a mix of own label products and brands (and sometimes sizes/ weights can vary a little between supermarket). Prices do not include any clubcard discount, but do include any promotional prices that were running at the time of data collection (first week of November 2024).
Actual prices at Aldi are cheaper than consumers perceive them to be
The good news for hard-pressed consumers is that actual prices are generally a little lower than perceived prices, averaging 6% cheaper.
At BVA BDRC we have collected information on how much consumers perceive this basket of typical Christmas day goods would cost at each supermarket. This is taken from a nationally representative sample of 1,000 interviews conducted in November 2024. To make the exercise as accurate as possible we not only listed the products available in each store, but we also showed respondents an image of the ‘Christmas basket’ of goods from each supermarket.
This is especially true for Aldi (which has grown rapidly in recent years) where the actual price is 16% lower than the perceived price. This may be a direct result of many competitors price matching with Aldi on selected products.
For Sainsburys actual and perceived prices are quite similar, and for Waitrose the actual price is actually more expensive than perceptions.
Customers of the relevant supermarkets are unsurprisingly more accurate at guessing the correct price – although it should be noted that Sainsburys users actually overestimate the price – suggesting that price is not such a strong driver for Sainsbury’s customers. Linked to this, Sainsbury’s have recently announced they are increasing wages on the shop floor, which could be an angle for attracting more talent and potentially creating a better customer experience in store.
Tesco and Sainsbury score relatively highly for quality compared to price
We also asked a nationally representative sample to rate the quality of the ‘Christmas basket’ products from different supermarkets.
When we look at those scoring at least 8 out of 10, Waitrose was seen as providing the highest quality products with Lidl (closely followed by Aldi) the lowest quality.
Tesco and Sainsbury’s (the two leading supermarkets by market share) score relatively highly for quality (over 50% rate their products as ‘high quality’) compared to perceived and actual prices.
Ultimately, we look at brand strength through two key lenses:
- Do people prefer to buy it?
- Can it hold its price without losing customers?
By blending real price data with consumer opinions, we get a well-rounded picture of how brands perform. On these measures, Tesco and Sainsbury’s stand out as two of the strongest players in an ultra-competitive market.
If you’re curious, we’ve got more data on:
- Which supermarkets people use most
- Brand preference across different groups
- How consumers perceive supermarket brands
Looking ahead, we’re gearing up for a bigger study that will:
- Track prices across a broader, more typical shopping basket
- Compare actual prices with what shoppers think they’re paying (with an even larger sample)
- Use our new Brand XP tool to uncover what really shapes brand perceptions and value
*Source Kantar World Panel
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