Aldi has had its best ever Christmas with it claiming to have attracted more than half a million new customers from the Big Four supermarkets. And with the wider grocery sector gearing up for a tough year as household budgets are squeezed by surging inflation, the discounter has committed to offering shoppers the lowest prices in 2022.
Aided by new store openings and the success of its Kevin the Carrot festive TV advert, Aldi managed to improve on bumper 2020 Christmas figures when demand in the supermarket sector was elevated by the Covid lockdown and the closure of hospitality venues. Its total sales in December were up 0.4% on last year and 8.1% higher than pre-pandemic levels in 2019.
Aldi noted that its premium Specially Selected range notched up its highest ever sales, with particularly strong demand for its beers, wines and spirits.
During the run-up to Christmas, the chain sold more than 43 million mince pies, 21 million pigs-in-blankets and 118 million Brussels sprouts. Its customers also bought more than 5.5m bottles of champagne, sparkling wine, and prosecco for festive celebrations.
“As we look ahead, the top priority for most families this year will be managing their household budgets in the face of rising living costs,” said Giles Hurley, CEO of Aldi UK.
“As the cheapest supermarket in Britain, Aldi will always offer the lowest prices for groceries, no matter what, and continue to support our British farmers and producers.”
Kantar data last week showed grocery price inflation reached 3.5% in December, adding nearly £15 to the average monthly grocery bill. As they did in the wake of the 2008 financial crisis, the discounters are expected to gain significant market share this year as cash-strapped consumers try to save money amid rising food, energy and mortgage costs, and higher taxes.
Aldi expects to create 2,000 jobs in 2022 as part of a two-year £1.3bn investment plan that includes the opening of 100 more stores and new distribution centres, whilst refreshing its existing estate.
Last week’s data from Kantar showed Aldi was amongst the strongest performers in the run-up to Christmas, alongside Tesco, Lidl, and Ocado. Tesco is expected to report robust figures when it releases its festive trading update on Thursday.
NAM Implications:
- The issue for branded suppliers is how to price for 2022.
- i.e. if the mults raise shelf prices to reflect real inflation…
- Will Aldi (and Lidl) raise prices to a point that will maintain differentials vs the mults?
- Or will they take a profit-hit in the UK (subsidised by their global business) to further take share from the mults.
- Methinks, maintaining current prices for Q1, would give the discounters increased share and kudos with the public.
- The Big Issue will then become: will the mults then crash prices?
- (at the expense of suppliers?)
