Ramadan could help supermarkets win the war against discounters Aldi and Lidl

Britain’s struggling supermarket chains, seeking ways to counter the rise of discounters, are stepping up efforts to draw the UK’s 3 million Muslims into their stores during Ramadan, reports The Independent.

UK market leader Tesco expects £30 million in extra sales during the month-long holiday, when Muslims cook feasts after daylight fasting ends. As the festival got under way this week, Wal-Mart Stores’s Asda said sales of Ramadan-related products were running 12 per cent ahead of last year’s pace.

“Ramadan is one of the most significant events of the year for supermarkets and it’s a big opportunity to boost sales,” David Gray, an analyst at Planet Retail, said by phone.

“In the current deflationary climate, anything that brings shoppers into stores is a good thing.”

Over the last five years, discounters Aldi and Lidl have upended the UK grocery sector, dragging the established rivals — Tesco, Asda, Sainsbury and Morrison aupermarkets— into a price war that’s squeezed profit margins and led to store closures and thousands of job losses.

Aldi and Lidl keep prices low by restricting their product ranges. That’s a disadvantage during religious holidays, when consumers seek specialized goods, and gives the established supermarkets a chance to fight back.

The UK’s Muslim population, often ignored by other retailers, is an attractive market for the supermarkets because it’s been expanding by about 4 per cent annually since 2011.