Aldi boss said the company would do “whatever it takes” to keep prices low (Peter Byrne/PA)
(Picture: PA Wire)An “unprecedented” change in consumer behaviour has attracted millions of British shoppers to Aldi over the last year, although profits at the discount supermarket slumped on the back of higher costs.
Aldi recently overtook Morrisons to become the UK’s fourth largest supermarket by market share, and attracted an extra 1.5 million customers to its stores over the past 12 weeks as squeezed shoppers abandoned traditional supermarkets in search of better value.
But despite a 0.9% increase in sales to more than £13.6 billion in 2021, the German discounter’s UK arm reported a 79% fall in operating profits which the company blamed on investment in prices, staff and Covid-related expenses.
Aldi said while sales growth in the UK and Ireland had slowed in 2021, trading had accelerated quickly in the past six months as pandemic restrictions were lifted.
According to research firm Kantar, sales were up almost 19% for the last three months compared with the same time last year, putting the supermarket on track for an extra billion pounds of sales this year.
In particular, sales of its premium range increased 29% during the three-month period as customers switched from more expensive supermarkets but still wanted higher-end products.
Giles Hurley, CEO of Aldi UK and Ireland, said soaring inflation meant customers were switching “in their droves”.
“We will do whatever it takes to maintain our discount to the traditional full price supermarkets and keep grocery prices as low as possible,” he said.
Commenting on last year’s profit reduction, he said that being privately owned gave the company some flexibility.
“Preserving our price discount and rewarding our people will always be more important to us than short-term profit.”
Aldi currently has just over 970 stores and is planning to open another 16 before the end of the year, with a target of hitting 1,200 stores by 2025.
