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The boss of discount supermarket Aldi said shoppers continued to be “under real pressure” despite a recent fall in food inflation as he vowed to cut prices further in the run-up to Christmas.
Giles Hurley, chief executive of Aldi UK, said most Britons were worried about food bills and “a new generation of savvy shoppers [were] turning their back on traditional supermarkets” in search of cheaper groceries. He added that Aldi would press ahead with “further price reductions . . . as inflation continues to fall back”.
His remarks came as the supermarket chain said it would increase its rate of investment in the UK to more than £1.4bn over the next two years, which will include the expansion and improvement of its network of stores. The cash injection was in addition to a previous two-year pledge of £1.3bn it made in 2021, the company said on Monday.
Along with German rival Lidl, Aldi has been expanding aggressively in the UK over the past two decades with its sales boosted by the recent cost of living crisis as shoppers flock to discount stores. Between them the pair now control 17.7 per cent of UK grocery market share, according to Kantar.
However, the data also showed they lost ground to incumbents for the first time in months in the 12 weeks to September 3 as traditional supermarkets ramped up their price cuts.
Hurley said “there will always be short-term fluctuations in market share” and insisted that discounters were expected to grow at a faster rate than traditional grocers in the coming years.
Aldi, which operates 1,000 UK stores and has committed to opening a further 500, said on Monday it planned to open 18 stores before the end of 2023.
The supermarket reported record total sales of £15.5bn in the year to December 2022, up from £13.6bn in 2021. It did not give a like-for-like comparison. Pre-tax profit was £152.6mn, up from £35.7mn, while its operating profit margin rose to 1.2 per cent from 0.4 per cent.
Hurley also defended Aldi’s relationship with suppliers and said it was paying them a fair price for their produce. The comment came after the founder of vegetable box company Riverford, Guy Singh-Watson, wrote a critical letter to the chief executives of Tesco, Sainsbury’s, Asda, Morrisons, Aldi and Lidl.
Hurley added Aldi was not in talks to buy any Wilko stores as the discount chain was being wound down. Rivals B&M and Poundland have bought 122 stores between them.
