Aldi delivered record results in the UK during its last fiscal year, helped by changing grocery shopping patterns during the cost-of-living crisis.
The company, which has attracted around one million more customers to its stores over the past year, said rising living costs had created a shift in attitudes, adding that a “new generation of savvy shoppers have turned their back on traditional, full-price supermarkets”.
For the 12 months to December 2022, Aldi UK & Ireland saw sales rise by 14% to £15.5bn, the highest level in its 33-year history. Operating profit nearly tripled to £178.7m, from £60.2m in the previous year, resulting in an operating margin of 1.2%.
Aldi noted that two-thirds of British households now shop at its stores. Latest data shows its sales growing at 17.1% – the fastest of any supermarket – with its market share at 10.1%.
The discounter also announced that its rate of investment in the UK would increase over the next two years (2023-2024) to more than £1.4bn, including work to expand its distribution and store network as well as improving existing stores and technology infrastructure to support growth.
The chain noted that it had already invested over £350m in price reductions so far this year across 650 items, with further reductions expected in the run-up to Christmas as inflation continues to fall back.
Giles Hurley, Chief Executive Officer for Aldi UK and Ireland, said: “Although inflation is easing, households are still under real pressure from higher living costs. As a result, Britain is shopping very differently to how it did 18 months ago – fewer trips, more own-label products, and switching supermarkets in search of better value … Shoppers know they’ll always get more for their money at Aldi. That’s a promise we’ve kept for more than 30 years.”
Hurley added: “There are still communities across the UK that don’t have easy access to quality, low-price groceries, and that’s something we want to address through our expansion, with plans to increase our investment even further over the next two years to £1.4bn in new and improved stores and distribution centres, creating thousands of jobs for our colleagues and more opportunities for our 5,000 British suppliers.”
NAM Implications:
- This sums up the discounter advantage:
- “New generation of savvy shoppers have turned their back on traditional, full price supermarkets”
- Second problem for the mults: Sales up 14%, operating profit x3.
- Third problem for the mults: £1.4bn investment in new and improved stores and distribution centres.
- All of the above represent a problem for suppliers not on Aldi’s shelves…
